FACTBOX-Iraq’s oil deals, signed and still to come

BAGHDAD, July 20 (BestGrowthStock) – Iraq has signed a raft of deals
with foreign oil companies that could take its crude output
capacity up to 12 million barrels per day, rivalling top
producer Saudi Arabia.

There are still hurdles in the way, not least a political
impasse following a March 7 parliamentary election that produced
no outright winner and as yet no new government.

A new Iraqi government could be inclined to renegotiate some
of the deals, though the lure of billions of dollars in revenues
could persuade whoever forms the next government to allow the
contracts to stand unchallenged.

The following are the signed deals, listed in order of the
size of the reservoirs involved, and others still in the works:


Britain’s BP Plc (BP.L: ) and China’s CNPC signed the first
major post-U.S. invasion oil deal in November for supergiant
Rumaila field, with estimated reserves of 17 billion barrels.
The two companies aim to boost production to 2.85 million bpd
from around 1.066 million bpd currently, and have accepted a
remuneration fee of $2 per barrel.

BP said it would invest around $15 billion. BP has a 38
percent stake and its partner CNPC has 37 percent while Iraq
holds 25 percent.


Russian energy giant Lukoil (LKOH.MM: ) and Norway’s Statoil
(STL.OL: ) sealed a deal for the supergiant, 12.9-billion-barrel
oilfield in Iraq’s south on Jan. 31. The partners agreed a
remuneration fee of $1.15 per barrel and pledged to take
production to a plateau of 1.8 million bpd.

Iraq holds a 25 percent stake, Lukoil 56.25 percent and
Statoil 18.75 percent. Statoil has said it would invest $1.4
billion over 4-5 years. Lukoil put total investment at more than
$30 billion. The firms would start recovering costs when output
reaches 120,000 bpd.


The massive 12.6-billion-barrel Majnoon oilfield was taken
by Royal Dutch Shell (RDSa.L: ), Europe’s largest oil company, and
Malaysia’s Petronas [PETR.UL], which inked the final pact on
Jan. 17. Shell officials have said the firms would invest “tens
of billions” of dollars.

Shell has a 45 percent share, with partner Petronas holding
30 percent and Iraq 25 percent. The firms will receive a
remuneration fee of $1.39 per barrel for boosting output to a
plateau production target of 1.8 million bpd from current output
of just under 50,000 bpd. Firms can start recovering costs once
output hits 175,000 bpd.


West Qurna Phase One found no bidders in the first auction,
but a subsequent competition behind closed doors led to a deal
with Exxon Mobil (XOM.N: ) and Shell. The companies inked the
final pact on Jan. 25.

The field has reserves of 8.7 billion barrels. The
consortium aims to boost output to 2.325 million bpd after
setting baseline production at 244,000 bpd. [ID:nRAS832007]

The group accepted a fee of $1.90 per barrel. Exxon has a 60
percent interest in the consortium, with Iraq holding 25 percent
and Shell the remainder. An Exxon executive said on July 19 that
the group aims to raise production by 10 percent by the end of
the first quarter of 2011.


China National Petroleum Company (CNPC), France’s Total
(TOTF.PA: ) and Petronas clinched the final contract for Halfaya
on Jan. 27, with a fee of $1.40 per barrel and a plateau
production target of 535,000 bpd from a current 3,100 bpd.

Total holds an 18.75 percent interest in the consortium, and
CNPC with 37.5 percent, Petronas 18.75 percent and Iraq 25
percent. Halfaya, situated in southern Iraq, has estimated
reserves of 4.1 billion barrels of oil. The firms would start
recovering costs when output hits 70,000 bpd.

On April 22, Total said it is considering a bigger stake in
the Halfaya oilfield. [ID:nLDE63L107]


Italy’s Eni (ENI.MI: ) sealed the final contract with Iraq on
Jan. 22 for the 4-billion-barrel Zubair oilfield. Eni and
partners, U.S.-based Occidental Petroleum Corp (OXY.N: ) and
KOGAS, set an output target of 1.2 million bpd. The group agreed
with Iraq to set the baseline production level at 183,000 bpd.

The consortium planned to invest over $20 billion and
accepted a remuneration fee of $2 a barrel. Eni has a 32.81
percent stake, Oxy 23.44 percent, KOGAS 18.75 percent and Iraq’s
Missan Oil Company 25 percent.


Iraq signed a final deal on May 17 with China’s CNOOC
(0883.HK: ) and state-run Turkish Petroleum Corporation (TPAO) for
a service contract for the 2.5- billion-barrel, three-oilfield
Maysan complex.

The fields were offered in the first auction of oilfield
contracts but not awarded. According to Iraqi officials, CNOOC
accepted the proposed remuneration fee of $2.30 for every
additional barrel of oil produced, compared with more than $20
per barrel it and its old partner China’s Sinochem — which
pulled out of the deal — had originally sought.

CNOOC and TPAO set a plateau target for the oilfields at
450,000 bpd after six years. CNOOC said it will hold a 63.75
percent stake in the venture while TPAO holds 11.25 percent.
Maysan comprises three fields — Bazargan, Abu Gharab and Fakka
in southern Maysan province.


CNPC started work last March on the al-Ahdab oilfield in
southeastern Wasit province after successfully renegotiating an
old development deal that dated back to Saddam Hussein’s

CNPC hopes to pump 110,000-130,000 bpd from the field, which
has estimated reserves of 1 billion barrels.


A smaller oilfield with 900 million in reserves, Gharaf was
won by Petronas and the Japan Petroleum Exploration Co (Japex)
(1662.T: ) in a fierce competition in the second bidding round,
and the deal was signed on Jan. 18.

Petronas will hold 45 percent, Japex 40 percent and Iraq 25
percent, and will receive a fee of $1.49 per barrel. Gharaf has
a production target of 230,000 bpd. The consortium expects to
invest $7-$8 billion. The firms can start recovering costs once
output reaches 35,000 bpd.


FACTBOX-Iraq’s oil deals, signed and still to come