Iraq set to negotiate oilfield contracts with world majors
Iraq is ready to move swiftly in negotiating multi-billion-dollar oilfield contracts with international majors and can sign deals before an investment law is passed by the government, a top oil official said on Friday. The Iraqi oil sector has been crippled by attacks on energy installations, political wrangling, lack of funds and mismanagement since the US-led invasion in 2003. To reverse output declines, it needs to ensure the flow of funds and restore security to allow for maintenance and development. "The investment law could take some time and we are not prepared to wait for that long," said Shamkhi Faraj, director general of marketing and economics at the ministry of oil. "I think (negotiations) can happen very fast. I am confident that we can do our own legislation within the contract itself to assure the investors that if any new regulation comes through it will not affect them," he added. Only small oil firms, such as Norway's DNO, have ventured into Iraq, home to the world's third largest oil reserves. The majors are eager to take a stake in the industry but are waiting for security and the political process to stabilize as well as an investment law. "I think we could talk more on the procedures and possibilities and when they are ready to come in. We are ready to make all the things required for making investment ... but they are hesitant because of the security situation," Faraj said. "But that doesn't really exclude that we start talking," he said. "What we have on offer are the oilfields in the south, the big ones that will add some 3 million barrels per day to our production and that's what the big companies are looking for." Iraq's oil minister was set to meet with officials from oil companies gathered in Doha for the International Energy Forum, a round table for producers and consumers, Faraj said. Among those expected in Qatar were Exxon Mobil Chief Executive Rex Tillerson and Chevron boss David O'Reilly. Oil services providers are also reluctant to enter Iraq with a bloody insurgency raging and growing sectarian bloodshed. Iraq pumped about 2.5 million barrels per day (bpd) and sold some 1.7 million bpd before the invasion, and prior to the 1990 Gulf War, crude output levels were at around 3 million bpd. Now it is struggling to maintain output of 2 million bpd. Faraj said exports in the second half of the year were expected to rise from 1.3 million bpd in the first quarter. Source: China Daily
