Chevron, Total Submit Study on Iraq's Majnoon Development

AMMAN Sep 18, 2007 (Dow Jones Newswires)

Oil giants Total SA (TOT) and Chevron Corp. (CVX) have jointly submitted to the Iraqi Oil Ministry a study on the development of one of Iraq's biggest oil fields, Majnoon, in the south of the country, a ministry statement said Tuesday.

"Total and Chevron jointly prepared studies about Majnoon oil field and were submitted to the ministry on the form of a memorandum of understanding," said the statement, a copy of which was obtained by Dow Jones Newswires.

"The ministry has set up a committee headed by Director General of the South Oil Company, Abdul Jabbar Lauby, to study the possibility of signing a memorandum of understanding with the two companies," the statement said.

However, if a memorandum of understanding is signed with these two companies that doesn't imply they have been promised the right to develop the field, the statement noted.

The ministry statement said the two companies, however, wouldn't be given preferential treatment when the Oil Ministry issues tenders to develop Majnoon and other oil fields. "The ministry will offer Iraqi oil fields for investment through tenders and contracts would be awarded to international companies on the basis of competition and it wouldn't give any preferential treatment to any company."

Total and Chevron have recently started preparatory work on the development of hydrocarbons from Majnoon, Iraq's fourth biggest oil field, which sits near the border with Iran, Dow Jones Newswires reported in August.

The two companies signed an agreement last year over Majnoon which has estimated total reserves in place of 12 billion barrels. Majnoon has currently a daily production capacity of around 50,000 barrels a day.

Foreign oil companies certainly won't begin working in Iraq until security improves in the country, but many will look to quickly finalize deals once the Iraqi government announces tenders to develop oil fields.

Iraq's Oil Minister Hussein al-Shahristani said earlier this month that his ministry could soon announce new tenders to develop oil fields in southern Iraq without waiting for the issuance of the long-delayed oil and gas law.

The Iraqi parliament hasn't started to debate the controversial law because of differences between the Kurds and the central government in Baghdad on some provisions of the draft document.

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