Iraq seeks oil investment, lures majors

If the agreements with international oil companies on the development of oil fields are signed, Iraq’s oil production will rise to six to eight million bpd, Iraq's oil minister has said

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By  Nicholas Wilson Published  September 5, 2006

Iraq’s crude oil production is some 2.5 million barrels per day (bpd) and will hit 3 milllion bpd by the end of the year, without the involvement of foreign majors, Iraq’s oil minister Hussain Al Shahristani said recently. New refineries will be built and existing ones improved and the country plans to begin exporting gasoline and other oil by-products by 2010, he said. If international firms become partners, then production will leap even higher, he said. “If the agreements with international oil companies on the development of oil fields are signed, Iraq’s oil production will rise to six to eight million bpd,” Shahristani said, without giving any timeframe for this target. He also said agreements being negotiated with foreign oil companies will not be limited to US companies, and Iraq will take the advantage of such European energy firms as BP PLC (BP), Royal Dutch Shell PLC (RDSA), Total SA (TOT) and firms from China. The world’s top oil companies are actively trying to win a stake in oilfields when Iraq finally opens to multibillion dollar investment. The majors are poring over data from Iraq’s most promising oilfields and some of its older zones to be ready when the bidding begins. Al Shahristani has said the race for oilfield deals worth US $20 billion could start this autumn. But oil men, noting the lack of security and yet-to-be-written investment law—there has been no decision made about previous rights to fields from the Saddam era—are under no illusion that drilling is imminent. Before the invasion, Total was in line for Majnoon and Bin Umar, ENI and Repsol wanted Nassiriyah and Shell was after Ratawi. These southern fields as well as West Qurna and Halfaya would be the country’s oil workhorse. The government says the bidding will be wide open with no pre-arranged deals.

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