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Shell Eyes Developing Iraqi Gas Fields - Iraqi Official

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Mar 13, 2007 (Dow Jones Newswires)

Royal Dutch Shell PLC (RDSA) has expressed its willingness to the Iraqi government to invest in Iraq's gas fields and to set up a pipeline that would connect these gas fields to Europe via Turkey, a senior Iraqi oil official said Tuesday.

"There are attempts by Shell to open talks with the Iraqi government to develop Iraq's vast gas fields," the senior official at the Iraqi Oil Ministry told Dow Jones Newswires.

He said that Shell held serious talks with Iraq on development of gas fields during the government of former Iraqi prime minister Ayad Allawi. "Now the company is trying to revive these talks."

Iraq, which has proven natural gas reserves of 3.15 trillion cubic meters, had a daily natural gas production of 1.164 billion cubic feet, of which 60% was flared.

Shell also wants to connect Iraq's gas fields to Europe, through setting up a new pipeline that would run parallel to an existing oil pipeline from Iraq's Kirkuk to Ceyhan on Turkey's Mediterranean coast, he said.

The Iraqi oil official said some European countries held a meeting recently in Syria to look at alternative sources of gas to those from the former Soviet Union, and Iraq attended that meeting.

Iraq, which has proven natural gas reserves of 3.15 trillion cubic meters, had a daily natural gas production of 1.164 billion cubic feet a day and 60 percent of that was flared.

Shell's move comes following the Iraqi cabinet's recent approval of a draft oil and gas law that regulates how foreign companies would be able to invest in the country's vast oil and gas reserves that could be as much as 115 billion barrels. To become a law, it needs to be approved by parliament.

Iraqi oil officials have identified seven gas fields earmarked for development: Akkas (Western Desert- Anbar province), Mansuria (Diyala province), Kormor (Salahidden province), Jeria Pika (Diyala), Khashem Ahmer (Diyala), Siba (Basra), and Chemchemal (Suleimaniya and Kirkuk).

Since 2005, Shell has been helping draw up a natural gas master plan for Iraq, the official said. It has been also working on technical studies on the Maysan oil field in the south and the large Kirkuk field in the north.

Copyright (c) 2007 Dow Jones & Company, Inc.

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