Thursday, Nov 05, 2009
By Gina Chon
Of THE WALL STREET JOURNAL
BAGHDAD (Dow Jones)--The Iraqi Oil Ministry said Thursday it has awarded a consortium led by Exxon Mobil Corp. (XOM) and Royal Dutch Shell PLC (RDSA) the right to develop the West Qurna-1 oil field in southern Iraq, representing the first American-led team gaining access to Iraq's oil patch.
The pact is the latest in a series of deals that Iraq has recently signed or initialed with some of the world's biggest oil companies. Earlier this week, Iraqi officials completed a final agreement with BP PLC (BP) and China National Petroleum Corp. and an initial agreement with a consortium led by Italy's Eni SpA. (E) (U.S. oil company Occidental Petroleum Corp. (OXY) participated as a junior partner in the Eni-led team.)
The Exxon-Shell team, combining two of the world's biggest publicly listed oil companies, had been seen as the favorite to win the contract, which calls for the consortium to boost production at the already-pumping field in exchange for a per-barrel fee. Among the three competitors, it offered the highest production target for the field, the oil ministry said.
An initial pact is expected to be signed on Thursday. The deal will then go to the Iraqi cabinet for approval before a final agreement can be signed, oil ministry spokesman Assem Jihad said.
Shell referred media calls to Exxon. An Exxon representative couldn't be immediately reached for comment.
The Exxon-Shell team beat out bids by a consortium made of Russia's Lukoil and ConocoPhillips (COP), and another one led by CNPC.
After rejecting the oil ministry's payment terms as too stingy during a June auction, the three competitors for West Qurna later accepted the ministry's original $1.90-per-barrel payment for additional oil extracted above current production levels.
-By Gina Chon, The Wall Street Journal
(END) Dow Jones Newswires
05-11-09 0943GMT
