Iraq’s Oil Ministry said it will sign a final deal on Tuesday with BP and China’s CNPC to develop its biggest oilfield, Rumaila, the nation’s first major oil pact since the US invasion in 2003.
The ministry will also sign an initial deal on Monday with Eni Spa over the Zubair oilfield, Oil Ministry spokes-man Asim Jihad said, after offering improved terms to bring the Italian oil major back to the table.
The agreement with Eni and its partners, Occidental Pet-roleum and South Korea’s Kogas, must be approved by Iraq’s cabinet before a final contract can be signed, according to Jihad.
Both deals involve supergiant oilfields and a promise of increased production that could catapult Iraq up to the top ranks of the league of oil producing nations.
Iraq’s oil infrastructure is dilapidated after years of war, sanctions and underinvestment, and while it has the world’s third largest reserves, it is only the eleventh largest crude producer.
The country hopes foreign investment will help it move up to third place with oil output of around seven million barrels per day (bpd) - triple current production of around 2.5 million bpd - within six or seven years.
Rumaila, with estimated reserves of 17 billion barrels, is the workhorse of Iraq’s oil sector, producing almost half of the its total daily output.
Eni has said it expects to invest $10 billion in Zubair, which has estimated reserves of four billion barrels, and will boost production to 1.125 million bpd from 200,000 bpd within seven years. Iraq will hold a second round of oilfield tenders in December.
© 7Days 2009
