October 19, 2009 / 7:56 AM / in 10 years

UPDATE 1-Iraq to sign final Rumaila oilfield deal in 3 weeks

*Iraq, BP, CNPC need to agree on Rumaila output

*Nassiriya oilfield development to cost around $8 bln

ISTANBUL, Oct 19 (Reuters) - Iraq expects to sign the final contract with BP (BP.L) and China’s CNPC to develop its largest oilfield within three weeks, the first major new oilfield deal since the 2003 U.S.-led invasion, an Iraqi official said on Monday.

Iraq’s cabinet approved the deal for the super-giant Rumaila oilfield last week, one of several deals near completion that could nearly triple the country’s oil output to around 7 million barrels per day (bpd).

The last step in finalising the deal before it is signed and takes effect was for Iraq and the two companies to agree on the exact current output from the field, the official said, speaking on condition of anonymity.

BP and CNPC won the deal to boost output from the Rumaila field to 2.85 million barrels per day (bpd) at Iraq’s first bidding round in June. Current output from the field was around 1.050 million bpd, the official told reporters on the sidelines of a workshop in Istanbul on Iraq oil contracts.

It would take about two weeks for the companies and Iraqi officials to measure and agree on Rumaila output and then another two days after that to sign the deal, he said.

“It should be finalised within the next three weeks,” the official said.

The Iraqi oil ministry says the cabinet has the final say on oil contracts, but some lawmakers insist that deals must also be submitted to parliament for appoval.

Analysts have said that there are no guarantees contracts would be respected by future Iraqi governments as there is no consensus on how oil wealth should be developed and shared.

The next election in Iraq takes places in January, when the durability of the contracts may be tested by a new administration.

The cost of developing the Nassiriya oilfield, for which Japan’s Nippon Oil 5001.T is negotiating a contract, would be around $8 billion, the official also said.

Iraq is negotiating that field contract outside of the bidding round.

Nippon and its partners plan to build a 300,000 bpd refinery at Nassiriya, the official said.

Issues around financing the development had held up the contract, he added. (Reporting by Simon Webb and Ayla Jean Yackley)

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