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Iraq hopes to pass the new oil law in
September
10.8.2007
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August 10, 2007
MOSCOW, -- Iraq hopes to call an open race as
early as September for its prized oilfields, its oil
minister said on Thursday after talks in Moscow
dashed Russian hopes of getting a slice of oil
reserves on preferential terms.
Hussain al-Shahristani said he hoped parliament
would pass the key new oil legislation after the
holidays, opening the way to call tenders for around
a third of Iraqi fields, although untapped and far
from producing deposits.
"We have been informed that they will come back to
work in the first week of September and pass the law
by the end of September," he said.
Iraq controls the world's third-biggest oil reserves
and the world's top firms have been manoeuvring to
win a slice of them for ages despite huge damage to
infrastructure from decades of wars and sanctions.
"There will be no specific talks with any company
over any particular field. What will happen is that
Iraq will announce the development of certain fields
and all qualified oil companies can come and
compete." |
Hussain Ibrahim Saleh al-Shahristani is the current
Iraqi Minister of Oil |
He also said that all 27 producing fields in Iraq
will be transferred to the national oil company,
which will be free to decide whether it wants to
have partners or not.
"For the discovered fields we know all the risks and
we don't see any necessity to bring foreign
companies as majority shareholders," he added.
Iraq also has 53 untapped deposits, of which some
are adjacent to producing ones and they would
thereby also be transferred to the national company.
"Therefore around one third is left and can be put
at open tenders," the minister said.
Oil and gas produced will belong to Iraq and the
fields will remain under state control. Only
companies that currently produce more crude than
they hope to extract in Iraq will be allowed to bid,
said Shahristani.
Given the fields' potential, Iraqi production could
rise to 6 million bpd by 2012 from the 4 million bpd
projected for 2010 and the current 3 million bpd.
Shahristani also said he was not concerned by the
approval of a new Kurdistan oil law. "The federal
government will not lose control (of Kurdistan).
Any contract in any part of Iraq has to be
authorised by the federal council for oil
and gas".
LUKOIL HOPES DASHES
The 27 fields producing include West Qurna, he said.
Russian oil major LUKOIL had hoped to revive a $4
billion (1.97 billion pound) Saddam-era deal to
develop West Qurna, but the minister said the issue
was not specifically raised at his meeting with
Russian Energy Minister Viktor Khristenko.
The meeting lasted for two hours and LUKOIL's top
executives attended. Russia did not support the
U.S.-led invasion of Iraq, prompting analysts to
speculate that its chances of reviving old deals
were slim.
Some analysts have however said U.S. oil major
ConocoPhillips, which holds 20 percent in LUKOIL,
could help the Russian company revive the contract.
Shahristani said he could not understand why the
deal should be revived, especially after it was
scrapped in the late days of Saddam's government on
the grounds that LUKOIL has done nothing to launch
the fields since 1997.
"This deal was signed and scrapped by the previous
regime. There are documents in the ministry's
archive saying that the contract is terminated
because its terms are not met," he said.
He also said Moscow was making no connection between
Iraq's $10 billion outstanding debt to Russia and
oil contracts.
"It has been clear in our discussions (in Moscow),"
he said.
Russian Energy Ministry quoted Khristenko as telling
Shahristani LUKOIL and other firms were prepared to
change the terms of old contracts, help Iraq with
key social plans and projects in third countries.
LUKOIL's shares closed 2.43 percent down, in line
with other Russian oil stocks and the broader
market.
Analysts have long said the West Qurna deal could
bring benefits only in the distant future and news
about it can have only a limited impact on LUKOIL's
share price.
Reuters
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