Iraq signs final deal with oil giants Exxon Mobil, Shell

BAGHDAD / IraqiNews.com: Iraq’s Oil Ministry on Monday completed a deal with U.S. major Exxon Mobil and Anglo-Dutch giant Shell to develop production in West Qurna-1, the war-torn country’s second biggest field. “Signing the deal with the Exxon Mobil and Anglo-Dutch aims to increase the production from 285,000 barrels-per-day to 2,325,000 barrels-per-day,” Oil Minister Hussein al-Shahrestani said during the siging ceremony, attended by IraqiNews.com news agency. West Qurna-1 in southern Iraq has reserves of around 8.5 billion barrels, according to Oil Ministry figures. Exxon Mobil and Shell will receive 1.90 dollars per additional barrel extracted from West Qurna 1. The deal was initially agreed on November 5, following a bid late June at Iraq’s first international oil auction since the industry was nationalised in 1972. A second auction in December saw Iraq award contracts to foreign majors including Russia’s Lukoil, which will work with junior partner StatoilHydro of Norway to develop the neighbouring West Qurna-2 field. The companies are expected to complete that deal on Saturday, Jihad added. West Qurna-2, with known reserves of 12.9 billion barrels, lies west of the equally enormous Majnoon field, which was auctioned in December to Shell and Malaysia’s Petronas. At 115 billion barrels, Iraq has the world’s third-largest proven oil reserves, behind only Saudi Arabia and Iran. Oil sales provide 85 percent of government revenues. Despite accusations that the United States led the 2003 invasion of Iraq to grab its oil wealth, Exxon Mobil was the only U.S. major to have been awarded a contract in the two auctions last year. SH (S)/SR 3