February 19, 2008 / 7:01 PM / 12 years ago

Petrel says hopes to secure Iraq oil concession

DUBLIN, Feb 19 (Reuters) - Irish exploration company Petrel Resources (PET.L) expects to secure rights from Iraq’s government for an oil exploration block in the country’s western desert, its managing director David Horgan said on Tuesday.

Over 70 companies on Monday registered to compete for oil extraction and service contracts to help develop Iraq’s oil reserves, the world’s third largest.

Petrel had signed a working agreement in 2002 with the then Saddam Hussein government to explore Block 6, which is situated between Iraq and Jordan.

“We have been invited to negotiations reaffirming our title to Block 6,” Horgan told Reuters in an interview. “I don’t expect a problem in renegotiating that.”

Iraq, currently producing around 2.3 million barrels per day, is seeking major foreign investment to tap into its massive reserves and significantly boost output.

Horgan said the company expected to go to Baghdad for talks in the coming weeks.

“Maybe by the summer the agreement will be in place,” he said, adding it was not clear how long the talks would last.

“We will probably end up with somewhere between 25 to 35 percent net (of the concession),” he said.

He said the company could then mobilise seismic crews with a “view to drilling a well in the spring of 2009.”

He added that production potentially could begin by 2010 to 2012.

Bloc 6 is believed to have a recoverable potential of about 3 billion to 5 billion barrels, but the site is one of the least explored in the western desert area.

Petrel is also involved in other oil projects in Iraq.

“The government wants us to first rubber stamp our exploration and development bloc before we develop a field,” Horgan said. (Editing by James Jukwey)

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