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Iraq expects to conclude all oil deals this month
January 16, 2010 / 3:52 PM / 8 years ago

Iraq expects to conclude all oil deals this month

BAGHDAD (Reuters) - All companies still waiting to sign final contracts for oilfields won in Iraq’s second bid round have agreed to proposed amendments and the deals will all be finalized by end-January, the government said on Saturday.

Talks to try and seal two other deals -- an Exxon Mobil (XOM.N)-led bid for West Qurna Phase One and an Eni-led (ENI.MI) bid to develop Zubair -- will take place in the coming two days, government spokesman Ali al-Dabbagh said.

“By the end of this month the Iraqi government will finalize all the deals from the first and second bid rounds,” Dabbagh told Reuters.

The series of deals inked last year have the potential to catapult Iraq into third place from 11th among global oil producers, giving it the billions of dollars it needs to rebuild after years of war and economic decline.

The first tender held in June and the second tender in December could eventually vault Iraq’s oil output capacity to 12 million barrels per day from 2.5 million bpd now, rivaling top producers Saudi Arabia and Russia.

The Iraqi Oil Ministry on Sunday will sign the final deal for the giant 12.6-billion-barrel Majnoon oilfield with Royal Dutch Shell (RDSa.L) and Malaysia’s Petronas PETR.UL.

On Monday it will sign a final contract with Petronas and Japan Petroleum Exploration Co (Japex) (1662.T) for the smaller Gharaf oilfield and on January 26, it will sign final deals with Angola’s Sonangol for the northern Qayara and Najmah fields.

Still outstanding from the second tender though are final deals for Halfaya, Badrah and West Qurna Phase Two fields.

West Qurna Phase Two, a super giant with reserves of 12.9 billion barrels, went to Russia’s Lukoil (LKOH.MM) and Norway’s Statoil (STL.OL).

Halfaya, with reserves of 4.1 billion barrels, was won by China National Petroleum Company (CNPC), Total (TOTF.PA) and Petronas. Russia’s Gazprom (GAZP.MM), Turkey’s TPAO, South Korea’s Kogas (036460.KS) and Petronas won the deal for Badrah field.

The government proposed amendments to the text of all the contracts that Dabbagh said did not affect the “essence” of the deals.

“All the remaining companies that won contracts in the second bid round approved the amendments and the Oil Ministry will set a date to sign final contracts with them before the end of this month,” Dabbagh said.

Also still in the pipeline are two other deals with the Exxon and Eni consortia for West Qurna Phase One, an 8.6-billion-barrel oilfield, and Zubair, which has 4 billion barrels in reserves.

Dabbagh said Eni executives would hold final talks with the Oil Ministry in Baghdad on Sunday while Exxon and its partners would be in town for final talks on Monday.

Reporting by Ahmed Rasheed; Editing by Michael Christie

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