www.iraqoilreport.com Iraq–China oil deal made final next week
Published by Iraq Oil Report on September 24, 2008Plus:
*Progress on another joint venture, this time for oil drilling
*What the passage of an election law means
*Iraq Press Roundup
An Iraqi oil ministry spokesman says Iraq and China will finalize a US$3 billion oil agreement next week. Assem Jihad says a Chinese delegation will visit Baghdad to sign the deal, The Associated Press reports.
The contract to develop the Ahdab field in southern Iraq is one of four Saddam-era contracts that the Oil Ministry has said it will uphold but renegotiate the terms per the new government’s oil prerogatives, as United Press International’s Ben Lando has reported.
According to the AP story: the contract will let China’s biggest oil company develop the field for 20 years. It’s expected to produce up to 25,000 barrels per day after three years and eventually reach 125,000 barrels per day.
However, this is the first test of Iraq’s pledge of oil transparency, and if the contract terms aren’t proven publicly, there’s no way to verify how much Iraqis will gain, or lose, in the deal.
Another joint venture between an Iraqi state-owned oil company and multinational firm is moving along in the planning stages. the AP reports “At the moment we are at an advanced stage in negotiations and it is all going well,” said James Milton, a London-based spokesman for the company. Ramco Energy Plc owns 32.7 percent of Mesopotamia Petroleum. Two senior Iraqi oil officials this week confirmed the talks, and said similar negotiations are underway with Saipem, an Italian oil services company.
The Iraqi officials said the proposed deals would involved the state-owned Iraq Drilling Co., and that tentative agreements were expected at the end of this year. One of the officials, who holds a senior position in the Iraqi company, said discussions started a year ago and were taking place in neighboring Jordan and Turkey, in addition to Italy.
The officials also said the Iraq Drilling Co. was upgrading its equipment with the purchase of 24 new Italian-made rigs in two contracts worth about US$311 million. The company intends to increase drilling capacity from 30 to 200 wells a year in order to to meet Iraq’s five-year goal of increasing crude oil production from nearly 2.5 million to 4.5 million barrels per day.
