Top Iraqi Panel Asks Oil Ministry to Review Shell Gas Deal -Minister

(Dow Jones Newswires), March 22, 2011

The Iraqi Council of Ministers' energy committee has returned to the Oil Ministry a draft deal with Shell to produce gas from southern Iraq oil fields, in order to review the economics of the pact before submitting it to the cabinet for approval, the country's oil minister said Tuesday.

"God willing, next week we will submit clear views on economics of the contract to the cabinet's Energy Committee," Abdul Kareem al-Luaibi said of the long-awaited $12 billion deal. "Then the Energy Committee will discuss it before submitting specific recommendations to the Council of Ministers."

The minister didn't elaborate on the economics of the deal.

The Energy Committee is headed by Deputy Prime Minister for Energy Affairs, Hussein al-Shahristani, with oil, electricity and water resources ministers also members of the committee.

Shell would hold 44% of the venture, Mitsubishi 5%, and Iraq state-owned South Gas Co. the remaining 51%.

The goal is to capture and produced gas at fields near the oil hub of Basra, including the supergiant Rumaila. Shell in early 2010 finalized contracts with Iraq to produce oil from two super oil fields in southern Iraq.

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