December 29, 2009 / 9:34 PM / 10 years ago

Iraq requests changes on nine oilfield deals

BAGHDAD (Reuters) - Iraq’s cabinet has requested certain changes in proposed deals with foreign firms to develop nine oilfields, the government spokesman said on Tuesday.

Ali al-Dabbagh said ministers had decided that proposed long-term service contracts for the oilfields, which were offered in two bidding rounds this year, needed “technical and legal” changes even after initial agreements for most of the fields had been signed.

The initial deals must be approved by the cabinet before they can be finalized with the foreign firms.

“There are no major changes in the contracts, and the contracts will be subjected to certain comments in order to comply with Iraqi prevailing laws,” he said.

Iraq has the world’s third-largest oil reserves and the deals include some of the country’s biggest fields, including the supergiant Majnoon and West Qurna fields, which each have more than 5 billion barrels in reserves.

Oil firms with stakes in the deals include Italy’s Eni (ENI.MI), Exxon Mobil (XOM.N), Royal Dutch Shell (RDSa.L) and Lukoil (LKOH.MM).

In the last two weeks, Iraq has signed initial agreements for many of the nine deals. Only two have been formally submitted for cabinet approval, the Oil Ministry says.

Deputy Oil Minister Abdul-Karim Louaibi said earlier on Tuesday the remaining seven would be sent for cabinet approval on Thursday.

It was unclear why the cabinet was requesting changes to the contracts given that most of them had not yet been formally submitted to the ministers for approval.

Dabbagh was unavailable for further comment.

Only one oilfield deal Iraq awarded in the two auctions has been finalized, a development contract for the Rumaila oilfield won by China’s CNPC and BP (BP.L).

“Iraq will begin talks with oil companies to prepare the final contracts as per the comments of the cabinet ministers ... Iraq is ready to sign these as soon as these comments are approved,” Dabbagh said.

He said production targets and fees the Iraqi government will pay to firms for developing the firms would not change.

Reporting by Mohammed Abbas; Editing by Christian Wiessner

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