Iraq Ends Talks with Anadarko Group Over Oil Contracts

AMMAN (Dow Jones Newswires), August 13, 2008

Iraq has terminated negotiations with an Anadarko Petroleum Corp.-led consortium for a short-term oil service contract, Iraqi oil industry sources said Tuesday.

The consortium, which also consisted of Vitol Holding and the United Arab Emirates' Dome International, was negotiating a short-term no-bid technical service contract, or TSC, to develop Luhais oil field in southern Iraq.

The Iraqi oil ministry is still waiting for other major international oil companies to submit new proposals for the or TSCs, the officials and sources said.

The TSCs have been negotiated on an exclusive basis with selected oil companies. BP PLC was selected to develop the giant Rumaila fields; ExxonMobil Corp. for the Zubair field; Chevron and Total SA for the West Qurna field, stage 1; Royal Dutch Shell PLC for the giant Kirkuk field; and Shell and BHP Billiton for Missan fields.

ExxonMobil and BP are the most enthusiastic firms that want to sign the TSCs, a person close to the oil ministry said.

"They are about to submit their new proposals," he said.

The Iraqi oil ministry decided to limit the TSCs to one year instead of the two-year term agreed upon earlier in the year, in order to avoid overlap with longer-term deals designed to develop large producing oil fields that the country tendered end of June, Iraqi oil officials said.

The TSCs would be a stopgap measure to boost production of each of the five major producing fields by 100,000 barrels a day each over a one-year period, the officials said.

"Iraq sets new conditions for the TSCs namely limiting them to one-year and that oil ministry could abolish any of them whenever a longer-term contract is signed," a person close to the oil ministry told Dow Jones Newswires. 

Copyright (c) 2008 Dow Jones & Company, Inc.

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