Iraq hopes to finalize China oilfield deal in August

BAGHDAD (Reuters) - Iraq’s oil minister will visit China before the end of August to try and finalize a deal to develop the Ahdab oilfield south of Baghdad and build a power station nearby, the Oil Ministry said on Sunday.

Oil Minister Hussain al-Shahristani said in April that Iraq would honor the $650 million deal signed in 1997 between Chinese National Petroleum Company (CNPC) and Saddam Hussein’s government, but the terms would be renegotiated.

“A high-ranking delegation headed by the oil minister will go to China by the end of the month to try and finalize the contract regarding the Ahdab oilfield,” Oil Ministry spokesman Asim Jihad said on Sunday.

Jihad said the new deal would be worth more than the one signed in 1997, given that the value of the field had risen over the past decade, but he would not put a figure on it.

The deal with CNPC, the parent company of PetroChina 0857.HK, needs to be renegotiated to ensure it is in line with a draft oil law agreed upon in Iraq in February 2007.

The Ahdab field is in Wasit province, which borders Iran. When the original deal was signed in 1997, planned production was 90,000 barrels per day. That exploration agreement was suspended due to UN sanctions.

Aziz Sultan, spokesman for the Electricity Ministry, said they planned to start laying the foundation for the new power plant on Tuesday and it would produce 1,320 megawatts when completed in four years.

Reporting by Wisam Mohammed and Waleed Ibrahim, editing by David Clarke and Maureen Bavdek