By Mohammad Al-Ghazzi

BAGHDAD, June 27 (KUNA) -- The Iraqi government is to establish a new oil company with a proposed capital of more than 9.5 billion Iraqi dinars (USD 7.9 million) and converting Maysan oil fields into a public company and disassociating it from the South Oil CompanySouth Oil Company.

In a statement to KUNA, Iraqi Oil Minister Hussein Al-Shahrastani said that the cabinet approved the establishment of the oil company in the governorate of Maysan under the name (Maysan Oil Company).

"It would be tasked to develop the fields and production in the province," Al-Shahrastani said, noting that the Oil MinistryOil Ministry had submitted a proposal to the cabinet on that regard, which received government blessing.

Al-Shahrastani further noted that the Iraqi government would follow a new policy to establish similar oil companies in each province "if we succeeded in developing the fields available in those provinces, with a target production figure of 100,000 barrels per day."

On his part, government spokesman Ali Al-Dabbagh told KUNA that the cabinet agreed, at its session two day ago, convert the Authority of Fields of Maysan into a public company.

Al-Dabbagh pointed out that the diversion of activities in the vast oil-rich region, as well as future development of recently-discovered non-productive fields and the completion of exploitation projects of associated gas, which now burns in vain, required the presence of an integrated and effective structure such as the public company, so as to intensively focus on such project.

The spokesman hoped that establishing the company would lead to implementing mechanisms required for the oil drilling sector in the province, which had been neglected and marginalized for decades.

The company would also be tasked with the export of oil through the ports of Basra and setting up a refinery in Maysan for processing crude oil, Al-Dabbagh added, noting that the company would also coordinate with international companies to upgrade undeveloped and semi-developed fields, with the aim of increasing production capacity in coordination with the Oil MinistryOil Ministry.

He concluded by saying that other objectives of the company was to increase its production level in the next five years to reach 360,000 barrels a day.

Maysan is located about 200 miles southeast of Baghdad and includes some of Iraq's most important oil and gas fields.