Jul 14 2011 |
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Iraq to Return to Pre-War Oil Production Levels
Sources say Iraq signed a deal with Royal Dutch Shell and the Japanese company Mitsubishi to collect $12 billion dollars worth of gas from the southern fields. A dispute between the Ministry of Oil and Mitsubishi had delayed the project, which was initially drafted in 2008, and awarded in 2009.
The project, called the Basra Gas Company, is at the forefront of Iraq's plans to modernize power plants and increase oil exports. The Iraqi government has 51% ownership of the project. Iraq suffers from persistent electricity shortages. The mission of the Basra Gas project is to collect gas to feed new power stations.
Iraq loses a billion cubic feet of gas a day in southern Iraq. The project intends to plug the deficit and export the surplus. The contract period is for 25 years, during which time 700 million cubic feet of gas will be pumped per day in the following 3 southern fields: Rumaila, Gharb Qurna and Zubair.
Shell is a multinational British-Dutch company, and is considered the second biggest private company in the world. The company, founded in 1907, is headquartered in The Hague in the Netherlands, with a central office in London.
Today, Iraqi oil reserves total 112 billion barrels, with some estimates at 150 billion barrels, making Iraq the second largest oil reserve in the world, after Saudi Arabia. Iraq's countless conflicts have prevented the country researching and updating its oil drilling and refining technologies. Using new methods, like three-dimensional sensors, will increase the amount of oil discovered to an estimated $360 billion dollars. Of 74 oil fields discovered in Iraq, only 15 have been developed. It could take Iraq anywhere from 18 months to three years to return to its 1990 production level of 3.5 million barrels per day.
© Yalla Finance 2011
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