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Iraq opens a new oil project with Chinese National Company
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Translated by IRAQdirectory.com - [3/12/2009]
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Iraq opened a new oil project with the Chinese national oil company, starting the first major oil deal with a foreign company, since the fall of Saddam Hussein's regime in 2003.
The Iraqi Oil Minister Hussain al-Shahristani, has joined the Chinese officials in al-Ahdab field in Wasit province southeast of the country, which is proposed to produce at the end about 110 thousand to 130 thousand barrels per day.
The Chinese company will manage the field under a contract was signed by Saddam, and the Iraqi government re-negotiated about this contract last year, to obtain better terms, through the change from production-sharing agreement in 1997 to fees deal for specific services.
Al-Shahristani started the process of seismic survey of the field, adding that the project would begin of digging 4 wells to be ready within few months.
Despite the small size of the project's production, but it is the cornerstone for Iraq, which is working to revitalize the oil industry.
Al-Maliki's government is seeking to attract foreign companies, through two rounds of bidding for service contracts of long-term projects to develop main oil fields.
Some officials in the sector complained from the conditions offered by the government, which prefer service contracts rather than sharing agreements to participate in the production which are preferred by companies.
The Iraqi oil production is currently 2.4 million barrels per day, a level lower than the production levels before US invasion. But al-Shahristani, hopes to increase production to 6 million barrels per day over the long term.
The Chinese company, which is the main company of PetroChina construction, started in the Ahdab since January, but it did not start the excavation work yet.
Iraqi officials said the deal includes an agreement to pump fuel to a nearby electricity generating plant.
In addition to al-Ahdab, the government negotiated on natural gas deal with Royal Dutch Shell.
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