Iraq Oil Conference Buzzes with Industry Prospects
BAGHDAD (THE WALL STREET JOURNAL via Dow Jones Newswires), December 5, 2008
A handful of major, international oil companies braved still-dicey security conditions here to attend the country's first significant petroleum conference, with several executives expressing hope they'd soon be setting up shop here.
The well-attended conference and the promise of a permanent presence by some of the best-known names in the industry is a boost of confidence for the struggling Iraqi oil industry, beset with challenges. Its producing fields need maintenance and investment, at a time when the security situation across the country, while improving, is still essentially a war zone by the standards of most international companies.
Sharply falling oil prices have presented Iraq oil officials with another big challenge: Falling revenue is likely to translate into more competition for government funds, which oil officials desperately need for their own oilfield investment plans.
Still, the conference here was buzzing with prospective oil-industry executives. Representatives of Japan's Nippon Oil Exploration Ltd., Lukoil Overseas Holding Ltd., an affiliate of the big Russian producer, and the oil subsidiary of Danish conglomerate A.P. Moller-Maersk Group all said they would now likely be considering establishing footholds in Iraq.
Also attending the session were executives from U.S. majors ConocoPhillips and Marathon Oil Corp., along with big state-owned giants like Indonesia's Pertamina.
Ryunosuke Onogi, general manager at Nippon, said with the improvements in the security situation, he expects the Japanese Foreign Ministry to lift a ban on companies working here, and Nippon may look to establish an office in Baghdad next year.
"The sooner the better," he said.
Alexander Byrikhin, a spokesman for Russia's Lukoil Overseas, said the company is also looking to have a presence in Iraq and is already working on three projects with the Oil Ministry in technical training for Iraqis.
Many big oil companies are competing for technical-service contracts to boost production at existing fields. Baghdad hopes to bid out the contracts by next summer.
The China National Petroleum Co. is ahead of the pack, signing in August a $3-billion deal with Iraq to develop an oil field in the southeast. It was the first major contract signed with a foreign company and the first revival of a deal made under the Saddam Hussein regime.
Faisal al-Thani, head of business development at Maersk Oil's Qatar office, said he was surprised by the large crowd at the oil conference. "We are all eager to get our foot in the door and establish a presence here," Thani said.
Copyright (c) 2008 Dow Jones & Company, Inc.
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