Business | Oil & Gas
Iraq expected to abandon most short-term contracts worth $3b
Iraq is likely to abandon plans to sign up to $3 billion in short-term oil contracts, a US diplomat said, putting in doubt deals that would give foreign oil firms their first major foothold in the country for decades.
- Reuters
- Published: 23:21 August 18, 2008
Baghdad: Iraq is likely to abandon plans to sign up to $3 billion in short-term oil contracts, a US diplomat said, putting in doubt deals that would give foreign oil firms their first major foothold in the country for decades.
"It appears that in present form [the Iraqi government] probably won't proceed with most of these or all of them," Charles Ries, coordinator for Iraq's economic transition at the US embassy, told reporters in Baghdad on Sunday.
"But I think that some of the companies are open to continued discussions even on relationship grounds, and some of the companies ... don't think it's worth their time."
Iraq has been negotiating six no-bid, short-term technical support contracts with international oil firms, worth about $500 million each, which are aimed at quickly boosting production by a combined 500,000 barrels a day.
The government of Prime Minister Nouri Al Maliki is hoping to sign a host of new oil deals by next year that would provide global oil companies their first major commercial access to the Opec member's fields in nearly four decades.
The first phase would have been the short-term deals, which should have been signed earlier this year but have been delayed in part due to disagreement over payment terms.
The deals involve Royal Dutch Shell; Shell in partnership with BHP Billiton; BP; ExxonMobil; Chevron with Total; and a consortium of smaller firms Anadarko, Vitol and Dome.
Ries said Anadarko and some of its partners had already walked away from talks over their deal, the first to apparently fall through.
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