Iraq's oil ministry said on Thursday it had agreed commercial terms for a key deal with Britain's BP and China's CNPC International to almost triple production at a giant southern oilfield. Officials from Iraq's state-owned South Oil Company and the two oil majors have put their initials to the deal, paving the way for final approval, ministry spokesman Assem Jihad told AFP.
"The contract will be sent to the cabinet for approval, then a final date will be chosen to sign the contract during an official ceremony," he said. The venture, expected to cost 14-20 billion dollars, is expected to boost production at the southern Rumaila field from the current one million barrels per day (bpd) to around 2.8 million bpd over its 20-year duration. Rumaila is already integral to Iraq's output, contributing almost half the nation's current oil production of around 2.5 million bpd.
BP and CNPC were the only companies to win a bid when Iraq offered eight contracts at a June auction. The companies agreed to receive only two dollars a barrel to operate Rumaila, which has known reserves of 17.7 billion barrels. It is the first big upstream deal between Iraq and foreign oil majors since nationalisation of the country's oil industry about four decades ago.
Under the terms of the contract, Iraq's State Oil Marketing Organisation will be allocated Baghdad's 25 percent stake, while BP will take 38 percent and CNPC hold the remaining 37 percent. The plan to increase production envisages a 10 percent hike within a year and raising the field's output by 300,000-400,000 bpd within three to four years, the Middle East Economic Survey (MEES) reported last week.
Comments
Comments are closed.