Jul 08 2011 |
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UPDATE: Shell, Iraq To Sign Initial $12 Bln Gas Deal -Official
Friday, Jul 08, 2011
(Adds details, background from fourth paragraph.)
By Hassan Hafidh
Of DOW JONES NEWSWIRES
Royal Dutch Shell PLC (RDSA) and Iraq have settled most pending legal issues that have delayed a $12 billion gas deal for more than two years and an initial pact could be signed mid next week, a senior Iraqi oil official said Friday.
Since the signing of an initial agreement in 2008 to begin negotiations on the project, the Iraqi oil ministry has been working to finalize a joint venture between its South Gas Co., Shell and Japan's Mitsubishi Corp. (8058.TO) to capture and exploit the huge volumes of gas flared from three giant southern oil fields, Rumaila, Zubair and West Qurna Phase 1.
"We are meeting with Shell and Mitsubishi in the middle of next week to finalize some points and we are hoping to sign an initial contract the following day," the official told Dow Jones Newswires.
Once initialed the deal still needs the approval of the Iraq government.
According to the draft deal with Shell and its partners, the venture would meet local needs and the extra produced gas would be for exports outside Iraq.
The three southern oil fields, all located in Basra governorate, are producing 1.05 billion cubic feet a day, but only 450 million cubic feet a day are utilized while the rest is flared.
Iraq is home to 112 trillion cubic feet of gas, but produces only around 1.5 billion cubic feet a day--of which 700 million cubic feet a day are burned for lack of infrastructure.
-By Hassan Hafidh, Dow Jones Newswires; +962 799 831 831; hassan.hafidh@dowjones.com
(END) Dow Jones Newswires
08-07-11 1723GMT
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