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Energy

Shell says still talking on Iraq oil service deal

LONDON, Aug 21 (Reuters) - Royal Dutch Shell Plc RDSa.L said it was still in talks with Iraq about a short-term service contract to help boost oil production, despite a U.S. diplomat in Baghdad suggesting such deals may be dropped.

“Negotiations go on,” a Shell spokesman said, but he declined to give further details.

Iraq and major international oil companies have been negotiating six short-term technical service contracts, each worth about $500 million and targeting a 100,000 bpd increase in output but Baghdad has been frustrated by the slow progress.

The contracts were to formalise the assistance which the companies had been providing free of charge in recent years and sources at the oil majors said this assistance had been reduced sharply in the past year.

The coordinator for Iraq’s economic transition at the U.S. embassy in Baghdad, Charles Ries, said on Sunday that Iraq’s government may drop all of the contracts. (Reporting by Tom Bergin; Editing by Paul Bolding)

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