Iraq cabinet may not discuss oil deals next week

BAGHDAD Sat Nov 21, 2009 6:17am EST

BAGHDAD (Reuters) - Deals to develop Iraq's Zubair and West Qurna oilfields may not be on the agenda at the next meeting of the cabinet as there are still legal and technical issues to resolve, a government spokesman said on Saturday.

Cabinet approval of a contract for an Eni-led (ENI.MI) group to develop Zubair and for an Exxon Mobil-led (XOM.N) consortium to work the West Qurna Phase One project had been expected two weeks ago, but has been pushed back twice now.

The last delay, on November 17, occurred because there weren't enough cabinet members in the country to hold a meeting, officials said then.

But government spokesman Ali al-Dabbagh said on Saturday the deals may not be ready for approval at the next scheduled cabinet session on Tuesday either.

"There are technical procedures that need to be conducted before approving the contracts," Dabbagh said.

Asked if the contracts would be approved on Tuesday, he replied, "We hope, but I expect it may take more time."

The Exxon Mobil group in the running for West Qurna includes Royal Dutch Shell (RDSa.L). Eni is partnered with Occidental Petroleum Corp (OXY.N) and South Korea's KOGAS (036460.KS). Both have clinched initial agreements with the Iraqi Oil Ministry.

Such delays in approving oilfield deals -- or any other official business for that matter -- are not uncommon in Iraq.

A consortium led by Japan's Nippon Oil Corp 5001.T has been on the verge of winning a contract for the Nassiriya oilfield since around April. Nippon executives were expected back in Baghdad on Sunday.

The oil deals are among several major contracts that Iraq is signing with global oil companies in an effort to almost triple current oil production of around 2.5 million barrels per day in six or seven years.

If they work out, Iraq could become the world's third largest oil producer. Decades of war, sanctions and underinvestment in its oil infrastructure have left it lagging in 11th place now.

(Reporting by Khalid al-Ansary; Writing by Michael Christie; Editing by James Jukwey)