Iraqi Cabinet Okays Four Key Oilfield Deals - Official
The Iraqi cabinet Tuesday approved oil deals with international companies to develop four oil fields including the supergiant Majnoon field in southern Iraq, a senior cabinet official said.
"The cabinet today approved deals to develop Majnoon, Garraf, Najmah and Qaiyarah oil fields," the official told Dow Jones Newswires.
He said the cabinet approved the deals for these fields because the oil companies that won the contracts agreed to changes to these contracts for these projects made by the cabinet.
Last month, consortia comprising Royal Dutch Shell PLC (RDSA), Malaysia's Petronas Nasional Bhd., Japan Petroleum Exploration Co. Ltd. (1662.TO) and Angola's national oil company Sonangol signed initial deals to develop the fields.
The companies must now sign final deals before they can begin development work, according to the oil ministry.
Five more major oil deals still need cabinet approval before they their final signature with the oil ministry, the official said. They include deals to develop Zubair, West Qurna Phase 1, West Qurna Phase 2, Halfaya and Badra.
Asked why the cabinet didn't approve these five deals, the official said they haven't yet been prepared by the oil ministry.
Iraq awarded 10 oilfield deals to international oil companies during its first and second post-war bidding rounds held last year. Only one contract was approved by the cabinet and signed last year with a consortium consisting of BP PLC (BP) and China National Petroleum Corp. to develop Rumaila, Iraq's largest producing oil field.
Were these 10 projects to be implemented and the companies to abide by the terms of the contracts, Iraq's crude oil production will reach some 12 million barrels a day in six to seven years from now, which is five times higher than present output of 2.4 million barrels a day, Iraq oil officials have said.
By many estimates, Iraq, which is a member of the Organization of Petroleum Exporting Countries, sits on the world's third-largest reserves of oil, behind Saudi Arabia and Iran.
However, Iraq's oil industry has struggled for years because of United Nations sanctions, war and underinvestment. As a result, Iraq long has been exempt from the output quota that other OPEC members adhere to in an effort to manage global oil prices.
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