CAIRO (Reuters) - Iraq’s government is expected to decide on deals with oil majors to develop the West Qurna and Zubair oilfields before the end of 2009, a deputy of the oil minister said on Saturday.
Cabinet approval of a contract for an Eni-led (ENI.MI) group to develop Zubair and for an Exxon Mobil-led (XOM.N) consortium to work the West Qurna Phase One project had been expected early in November, but has been pushed back.
“Before the end of the year, ... both contracts will be ratified,” Abdul-Karim Louaibi told reporters in Cairo when asked to give a timeframe.
On the Zubair field, Louaibi said: “Now it is in front of the cabinet. The cabinet has some comments on it and it will be discussed God willing in the coming days.”
The deals are part of Iraq’s bid to breathe life into its struggling energy sector, which after decades of war and sanctions is outdated, producing only around the same amount of oil as it did before the 2003 overthrow of Saddam Hussein.
Iraq is in the process of signing multibillion-dollar deals with global oil majors aimed at nearly tripling crude output to 7 million bpd and transform it into the third-largest crude producer in the world from 11th now.
A deal to develop the giant Nassiriya oilfield would take longer. Louaibi said Iraq will hold talks with “Japanese officials.”
A consortium led by Japan’s Nippon Oil Corp 5001.T had made a proposal to develop Nassiriya. The group has been close to clinching the $8 billion engineering, procurement and construction contract for the 4-billion-barrel oilfield in southern Iraq for months.
The proposal is awaiting the approval of the Iraqi Finance Ministry, a senior Iraqi oil official said on Wednesday.
Final talks to narrow differences had been expected to take place in early November but the Japanese delegation refused to leave the vicinity of Baghdad airport to go to the Oil Ministry, according to Iraqi Oil Minister Hussain al-Shahristani.
Nippon and its partners returned to Baghdad last week for those talks.
Iraqi officials say Nassiriya has the potential to produce 100,000 bpd within 18 months.
The deals are among the most significant oil contracts signed by any country in recent years, and have the potential to sharply alter the balance of geopolitical power in the region and in OPEC.
According to the preliminary agreement signed on Nassiriya, the Japan Bank for International Cooperation would finance the deal through a loan paid into a bank account run by Iraq’s South Oil Company.
Writing by Inal Ersan