The agreement marks Statoil’s first development contract in the Middle East. The company says that it will invest $300 million over the next four years in the estimated $2,500 million-3,000 million project. Returns on the capital investment will be covered through the sales of condensate and liquefied petroleum gas (LPG) over a four-year period from the start of production, which is scheduled for late 2004.

Phases 6-8 involve the installation of three offshore wellhead platforms linked by pipelines to an onshore gas treatment facility. The local Sadrawas awarded in August the engineering, procurement and construction (EPC) contract, worth $394 million, for the offshore works for the onshore package. Bid evaluation is under way for the onshore package, with three international firms competing for the EPC contract.