Iraq in a lot of dealmaking

Apr 24, 1997 02:00 AM

Oil Minister Amir Muhammad Rasheed said that Iraq was close to signing an important oilfield deal with a unit of Italian energy group ENI. The long-discussed deal would be the first in Iraq for ENI but a company source was less upbeat than Rasheed, saying the project could not go ahead until UN sanctions were lifted.
Rasheed, who visited Rome for talks aimed at boosting economic relations, said he held discussions with ENI and hoped that a deal with its oil production and distribution unit Agip to develop the Nasiriya oilfield could be concluded swiftly.
Rasheed described the Nasiriya deal as "strategic co-operation" and a "partnership" and said Agip was planning to invest $ 2 billion to develop the field if the deal went ahead. The concession would be valid for about 23 years and Rasheed said he expected production to reach 300,000 bpd after around 4 years with annual revenue of $ 2 billion.
He said it was a bilateral deal that was good for both sides, and he did not foresee problems. Iraq is also discussing a gas pipeline to Turkey, an oil pipeline to Jordan, upgrading of refineries and other projects with Agip.
Iraq, owner of the world's second largest oil reserves after Saudi Arabia, said this month 10 developments were up for grabs and talks were underway with companies from Canada, Malaysia, Australia, Italy, South Korea, Turkey, Indonesia and Algeria. Russia's LUKoil has signed to develop the seven billion barrel West Qurna field.
Rasheed made clear that other would-be winners would need to show political support for the ending of sanctions.
Rasheed said he also expected to conclude a deal with China soon for Iraq's Ahdab oilfield development and to sign deals with French companies. Total SA and Elf Aquitaine have said they are in talks with Iraq. Rasheed said Iraq was looking to deals with foreign companies to increase output capacity to 6 mm bpd by exploiting massive unexplored reserves estimated by Baghdad at 214 billion barrels. Current output capacity was 2.5 million bpd, compared with 3.5 million bpd before the Gulf War.

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