UPDATE 1-Occidental, Pertamina mull Sonangol’s Iraq deals

* Seeking partners to spread costs and risks

* Development plan ready next month perhaps

(Adds details, byline)

By Rania El Gamal

BAGHDAD, July 18 (BestGrowthStock) – U.S. oil major Occidental
Petroleum Corp (OXY.N: ) and Indonesian state oil firm Pertamina
have shown an interest in taking a stake in Sonangol’s two Iraqi
oilfield development projects, a company official said Sunday.

“Our proposal will be for Sonangol to have a percentage of
45 percent … in Najmah and Qayara,” Sonangol executive J. da
Graca Luis told Reuters in Baghdad on the sidelines of a meeting
between oil companies and the Oil Ministry.

“The rest will be for Occidental or Pertamina or whoever,”
said Luis, who is the Angolan state oil firm’s asset manager for
Najmah and Qayara.

Sonangol currently has a 75 percent stake in the oilfield
projects, with the Iraqi state oil company holding 25 percent.

The fields are among a series awarded to companies last year
which could catapult Iraq into the top ranks of global oil
powers, potentially rivalling Saudi Arabia with a production
capacity of 12 million barrels per day within seven years.

The Qayara field, with an estimated 800 million barrels, and
Najmah with 900 million are in Nineveh province in Iraq’s north,
where Sunni Islamist insurgents including al Qaeda remain
active. It remains one of the most dangerous areas of the
country despite a sharp fall in overall violence elsewhere.

Luis said the aim of enticing other international partners
into the ventures was to spread the risk and investment costs.

The company clinched the deals with an offer of a $6 a
barrel remuneration fee and a plateau production target of
110,000 bpd for Najmah, and a fee of $5 a barrel and output
target of 120,000 bpd for Qayara.

The fees were among the highest paid to any of the oil firms
that won 20-year oilfield service contracts tendered, reflecting
the risks and relatively low quality of oil at the two sites.

Sonangol has said it will invest $2 billion in Qayara.

It has also said it would welcome the building of a small
refinery nearby that would help it refine the heavy oil in the
reservoirs that it is developing, but Luis said building the
refinery was not a condition.

Luis said Sonangol would hold the first meetings next month
with potential partners.

An initial development plan for the fields was likely to be
ready next month, as well, he said.

Angola emerged from an almost three-decade long civil war in
2002 to rival Nigeria as Africa’s top oil producer.
(Writing by Michael Christie; Editing by David Holmes)

UPDATE 1-Occidental, Pertamina mull Sonangol’s Iraq deals