CNPC, BP Hold Talks on Bid to Develop Iraqi Oil Field
SYDNEY (Dow Jones Newswires), Jun. 24, 2009
China National Petroleum Corp. has held talks with U.K. oil major BP PLC about a joint offer to develop Iraq's Rumaila field, ahead of the country's first bidding round in 30 years, a person familiar with the matter said Wednesday.
China's state-owned CNPC is also working on two more bids in the auction, due to take place June 29-30, including one with Chinese rival Cnooc Ltd. and Malaysia's Petroliam Nasional Bhd, or Petronas.
The talks with BP focused on CNPC coming in as a minority partner for a service contract to develop the Rumaila field, which is the largest in the round in terms of output, said the person, declining to be named. He didn't say whether the discussions were ongoing.
Rumaila's current output capacity is around 1 million barrels a day, but the Iraqi government hopes foreign expertise can lift production to 1.75 million barrels a day, according to consultancy IHS Global Insight.
CNPC's spokesman, Liu Weijiang, couldn't immediately be reached for comment. Toby Odone, the BP spokesman, said BP was one of the companies shortlisted to bid in Iraq and was still finalizing its plans.
CNPC is working with Royal Dutch Shell PLC and China Petrochemical Corp., known as Sinopec, on a bid to develop the Kirkuk oil field after agreeing on shareholdings in a consortium, the person said.
In April, Jeroen van der Veer, Shell's chief executive, confirmed the Anglo-Dutch oil major was in talks with Chinese firms to be a part of the consortium bidding for an Iraqi oil field.
The third bid will involve a consortium of CNPC, Cnooc and Petronas for one of the smaller oil fields included in the round, the person said.
CNPC will operate the oil field, either Missan in southern Iraq or Bai Hassan in the country's north, if the bid succeeds, the person said.
Azman Ibrahim, a spokesman for Petronas, said Malaysia's state oil company "is bidding for some acreage in Iraq, on our own and with partners," but refused to give details.
Xiao Zongwei, the joint board secretary of Hong Kong-listed Cnooc, declined to comment.
CNPC has already built a relationship with the Iraqi government. In March, it secured the first major oil development deal with Iraq since the fall of Saddam Hussein in 2003. The $3 billion project was to develop al-Ahdab oil field in Wasit Governorate, south of Baghdad.
Iraq is the world's third-largest oil producer and is seeking to boost production and renew an industry that has been shackled by years of war and sanctions.
Current production is around 2.4 million barrels a day, but Baghdad hopes foreign investment will lift this output to 4 million barrels a day over 20 years.
The oil ministry is offering foreign companies a total of eight oil and gas fields, containing combined reserves of 43 billion barrels of oil equivalent, or 37.3% of the country's total.
Some 32 international companies, including oil majors such as Shell, BP, Exxon Mobil Corp., Chevron Corp., and Total SA, are expected to take part in the bidding process, to be held in Baghdad.
The country's oil ministry had pre-qualified 35 international companies for the first bidding round announced a year ago.
Copyright (c) 2009 Dow Jones & Company, Inc.
Operates 27 Offshore Rigs
- BP Chairman Svanberg to Retire; Search Starts for Successor (Oct 19)
- BP Midstream Partners Seeks To Raise Up To $893MM In IPO (Oct 16)
- BP, Azerbaijan's SOCAR To Sign Caspian Sea Exploration Deal In 2017 (Oct 12)
Company: Exxon Mobil Corporation more info
Operates 13 Offshore Rigs
- ExxonMobil Says Julia, Hadrian South Operations Back To Normal After Nate (Oct 10)
- Iraq's Talks with Exxon on Southern Oilfields in Final Stages-Minister (Oct 09)
- U.S. Gulf Oil Producers Start Evacuating Staff Ahead of Tropical Storm Nate (Oct 05)
Company: Shell more info
Operates 27 Offshore Rigs
- API Panel Member: Voluntary Methane Program Forthcoming (Oct 06)
- Eni Bets Big on Zohr Explorer Finding New Treasure (Oct 06)
- Shell, Varo End Talks on Germany Refinery Stake Sale (Oct 06)
Company: Total S.A. more info
- Total CEO: US Shale Oil Industry To See Wave Of Investment (Oct 18)
- Total's CEO Says Will Try To Move Ahead With Iran Gas Project (Oct 17)
- Total Expands Presence in Mexico (Oct 12)
Company: Chevron Corporation more info
- Chevron Approves New Tech Investment To Raise Output At North Sea Field (Oct 20)
- Canada's Keyera Signs Pact With Chevron To Transport, Store NGL (Oct 10)
- Chevron Starts LNG Output at Australia's Wheatstone (Oct 09)
Company: PETRONAS more info
Operates 9 Offshore Rigs
- Exec: Petronas' Canadian Unit To Look At Other LNG Opportunities (Oct 11)
- Adviser: Malaysia's Petronas Puts Some Canadian Assets Up For Sale (Oct 04)
- Petronas Chem Sells Half Of Polymers Business To Saudi Aramco For $900MM (Oct 02)
Company: Sinopec more info
- Buyers Eye Sinopec's Argentina Oil Assets in Sale Worth Up to $1B - Sources (Oct 09)
- Shengli Oilfield Cuts Internet For Some Offices After Cyber Attack (Aug 21)
- Sinopec Engineering Arm Taps Asia Petrochemicals Growth (Aug 21)
Company: CNOOC more info
- CNOOC Completes Test Runs at Huizhou Refinery in Guangdong - Report (Oct 09)
- Exxon Mobil Bets on Brazil, Buys 10 Oil Blocks in Auction (Sep 28)
- China's CNOOC Begins Oil Partner Hunt in Mexico Deep Waters (Sep 15)
Company: CNPC more info
- China's CNPC Starts Third Natural Gas Pipeline To Shanghai (Oct 13)
- Eni Inks Cooperation Deal With China's CNPC (Sep 13)
- CNPC, Guangdong Sign Strategic Deal On S. China Sea Methane Hydrate (Aug 28)