Petrobras May Compete for Iraqi Oil Deal

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Dow Jones Newswires
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AMMAN (Dow Jones Newswires), Mar. 26, 2009

Brazil's state-run oil company Petrobras could join a U.S. firm and two European companies in competing for a contract to develop Iraq's Nahr Bin Umar oil field, a senior Iraqi oil official involved in talks with international oil companies told Dow Jones Newswires Thursday.

"Petrobras had carried out studies on Nahr Bin Umar during the 1970s and the Oil Ministry may invite it for negotiations," the official said.

Earlier this week, an Iraqi oil official said Baghdad had invited a consortium of Total SA and Chevron Corp. to compete against StatoilHydro ASA and a fourth company which he didn't name.

In the 1990s, Total signed a tentative agreement with Saddam Hussein's regime to develop Nahr Bin Umar, but no final deal was signed due to the then economic sanctions.

The field has about 6.6 billion barrels of reserves and a potential production of 440,000 barrels a day.

Petrobras worked in Iraq in late 1970s and it actually discovered the current super giant Majnoon oil field with proven oil reserves of around 12 billion barrels, according to former Iraqi officials.

The Nahr Bin Umar field's contract would be similar in format to a contract in the southern Nasiriyah field for which Japan's Nippon Oil Corp., Italy's Eni SpA and Spain's Repsol YPF SA are vying.

The contracts would be in addition to two current bidding rounds for service contracts in Iraqi oil fields, which hold the world's third-largest reserves but are underexploited due to decades of war, sanctions and underinvestment.

Development of Nahr Bin Umar is part of a 'Crush Plan' launched earlier this month by the Oil Ministry to increase Iraqi oil production by 500,000 barrels a day in two years time. Iraq is currently producing around 2.3 million barrels a day.  

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