Sonangol Signs Initial Pacts for Two Iraqi Oil Fields

AMMAN (Dow Jones), Dec. 30, 2009

Sociedade Nacional de Combustiveis de Angola, better known as Sonangol, signed Wednesday in Baghdad two initial deals to develop Qaiyarah and Najmah oil fields in northern Iraq, officials said.

The Angolan national oil company won the two fields in Iraq's second post-war licensing auction held in Baghdad Dec. 11-12. It pledged to raise production from Qaiyarah and Najmah oil fields to 120,000 barrels a day and 110,000 barrels a day at a fee of $5 and $6 a barrel respectively.

The two fields, each holding some 800 million barrels of proven oil reserves, are located near the volatile city of Mosul, 400 kilometers north of Baghdad.

The deals, initialed by Iraq's Deputy Oil Minister Abdul Kareem al-Luaby and an executive from Sonangol, still need the approval of the Iraqi cabinet before their final signature, the officials said.

Sonangol said in a statement earlier this month that several companies have expressed the wish to set up partnership with it for the development of the two Iraqi oil fields. It gave no further details.

Sonangol said the move to drill abroad was part of a strategy to bolster Angola's global image. The oil company is also eyeing exploration opportunities in Brazil, Ecuador and the tiny African island state of Sao Tome and Principe.

Angola emerged from an almost three-decade long civil war in 2002 to rival Nigeria as Africa's top oil producer. It currently holds the rotating presidency of the Organization of the Petroleum Exporting Countries. It hosted in Luanda on Dec. 22 an OPEC policy meeting that decided to leave the group's output ceiling unchanged.

Copyright (c) 2009 Dow Jones & Company, Inc.


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