August 15, 2007

Iraq's Oil Fields Open for Business (Soon)

Iraq is cautiously opening its oil fields to foreign and domestic investment, but is trying to do it on their own terms.

In September, Iraq’s parliament is expected to ratify a law allowing Western countries to invest in Iraqi oil fields. The country is believed to have oil reserves of 115 million barrels, half of them unexplored.

From now on, all previous oil contracts will be reviewed with an eye toward spreading the country’s oil wealth evenly among Shiites, Sunnis, Kurds and other groups, according to proposed legislation.

Iraq’s national oil company will be given first access to the country’s enormous West Qurna field and decide which foreign companies to work with.

Russian giant Lukoil is hoping an agreement they had under Saddam Hussein to drill there still holds.

Total and Chevron have reportedly agreed to team up on Majnoon, the fourth-largest oil field in Iraq.

BP is said to have “been asked” to look into oil fields near Kirkuk in the north, while Shell is thought to have looked at Ramaila, Iraq’s largest oil field, according to the Times Online.

As rich in oil as the country is, Iraq has suffered from a lack of refined crude oil products as insurgents have targeted the oil infrastructure.

Iraq’s improved relations with Iran have paved the way for a deal to build a 32-inch pipeline that will transport crude from the southern port of Basra to Abadan, an Iranian port just across the border.

Under the agreement, Iran would buy 100,000 barrels or more of Iraqi crude to refine and sell back to Iraq.

It was not clear who would pay for the pipeline or when it would be constructed.

Sources:

“Total and Chevron agree to work together in Iraq”
Times Online (U.K.), August 9, 2007

“Iraqi oil minister says no special deals for Russia”
Associated Press, August 9, 2007

“Iran, Iraq sign oil pipeline deal”
Agence France-Presse, August 11, 2007

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