Iraq’s Oil Ministry expects to formally award two oil field deals to international oil companies by the end of December after resolving technical problems that had prevented the cabinet from approving the projects.
In November, the cabinet twice decided against approving the contracts to develop the Zubair and West Qurna fields to give cabinet officials more time to work on the draft agreements.
“We had some ambiguities in the contracts, but they were small matters. This should be on the cabinet agenda in the next few weeks and we expect final approval by this month [December],” says the source.
He declined to elaborate on the problems.
Iraq signed a preliminary 20-year deal on 2 November with a consortium led by Italy’s Eni to develop the southern Zubair field near Basra. It awarded the licence to Eni and its consortium partners, the US’ Occidental Petroleum and Korea Gas Corporation.
On 5 November, the ministry awarded a 20-year contract to the US’ ExxonMobil Corporation and the UK/Dutch Shell Group to develop the West Qurna oil field, also in Basra province, but the deal still needed to be approved by the cabinet.
Iraq’s cabinet approved a $15bn technical service contract, awarded on 3 November to the UK’s BP and its partner on the project, China National Petroleum Corporation, to develop the Rumaila oil field in Basra.