- Prison Planet.com - https://www.prisonplanet.com -

Iraq fails to sign contracts with global oil majors

AFP [1]

Monday, June 30, 2008

BAGHDAD (AFP) – Iraq said on Monday
that it had failed to sign technical support deals with global oil majors
hoping to cash in on boosting the war-torn country’s extensive but underexploited

Iraq is still negotiating with Shell, BP, ExxonMobil,
Chevron and Total, and a consortium of other smaller oil companies, to
develop six oil blocks and two gas fields, Oil Minister Hussein al-Shahristani
told a press briefing.

"We did not finalise any agreement with them because
they refused to offer consultancy based on fees as they wanted a share
of the oil," he said.

(Article continues below)

"The TSAs (technical support agreements) are only
simple consultancy contracts to help us raise the production during the
interim period" before the ministry enters into long-term contracts
to develop the oil and gas fields.

The widely expected arrangement was to pave the way for
global energy giants to return to Iraq 36 years after Saddam Hussein threw
them out, and was seen as a first step to access the earth’s third largest
proven crude reserves.

The head of British-Dutch oil company Shell nevertheless
said he hoped to sign a deal with Baghdad in the next few weeks.

"I hope it (a deal) is within weeks and not months,"
chief executive Jeroen van der Veer told reporters on the sidelines of
the World Petroleum Congress, one of industry’s biggest events.

The head of Spanish oil group Repsol YPF, Antonio Brufau,
added that "many things have to be clarified before signing in Iraq."

Last week, oil ministry spokesman Asim Jihad told AFP
that it would sign the support contracts on Monday and award longer-term
deals to 41 other energy companies.

"We chose 35 companies of international standard,
according to their finances, environment and experience, and we granted
them permission to extract oil," Jihad said.

Six other state-owned oil firms from Algeria, Angola,
Pakistan, Thailand, Turkey and Vietnam have also been selected to compete
for extraction deals.

Iraq wants to ramp up output by 500,000 barrels per day
from the current average production of 2.5 million bpd, about equal to
the amount being pumped before the US-led invasion in March 2003.