Four contracts still valid, says Iraq Oil Ministry

30 May 2003
One of four contracts signed with foreign oil companies for developing existing fields and all three new field development agreements are still valid, Oil Ministry officials in Iraq say. All seven agreements were signed before the start of the war for Iraq in March 2003.

The sole surviving development contract was signed with PetroVietnamin 2002 for boosting production at the Amara field to 80,000 barrels a day (b/d). Three other contracts were signed but are now cancelled. They are for developing the West Qurna field, signed with a consortium of Russian oil companies led by Lukoilin 1997; for developing Al-Ahdab field, agreed with the China National Petroleum Corporation (CNPC)in 1997 and an agreement with the Syrian Petroleum Corporation (SPC)for the Nur field signed in 2001, which was never ratified. Chief executive of the interim management team at the Oil Ministry told reporters in Baghdad at the end of May that the Lukoil contract, cancelled by the Iraqi government at the end of 2002, is definitely cancelled. He said that the agreement with the consortium led by CNPC had been frozen by mutual agreement. Lukoil has announced that it will dispute the cancellation of its West Qurna field agreement.

Three exploration and development agreements for areas west of the Euphrates are still valid, oil ministry officials say. These are for Western Desert block 3 with Indonesia's Pertamina; Western Desert block 4 with Russia's Stroitransgazand Western Desert block 8 with India's Oil & Natural Gas Corporation.

More than 20 other agreements were reached in the late 1970s with foreign oil companies for the development of existing oil fields. None of these went further than memorandums of understanding and heads of agreement. Many involved verbal commitments to develop fields once all international sanctions were lifted.

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