BP Wins Huge Oil License in Iraq

Iraq’s cabinet has approved a deal with BP to develop the huge Rumaila oil field in the country’s first international energy deal since the American-led invasion in 2003.

The agreement, which was brokered in June during the first round of tendering for licences to exploit Iraq’s enormous and largely untapped hydrocarbon resources, should also send “a strong signal” to other energy groups that the Iraqi administration is keen to secure deals.
Abdul-Mahdy al-Ameedi, the deputy director of Iraq’s Petroleum Contracts and Licensing Directorate, said: “We believe that we have a strong pillar now for our work toward realising our plans.” Mr. al-Ameedi was speaking in Istanbul, where Iraqi officials are meeting oil companies ahead of a second tender of oil-field contracts due in December.

Separately, Iraqi officials have also reopened talks with Royal Dutch Shell (RDSa) about a revised offer for licences connected to an oil field in the city of Kirkuk in the north of the country.

BP will share the licence to extract oil from the Rumaila field near Basra with China National Petroleum Corporation (CNPC), the state-owned parent of PetroChina, and the Iraqi oil ministry. A spokesman for BP yesterday refused to confirm that the deal had received official sanction, adding that the company had heard only reports of the approval and had not spoken with Iraqi officials directly.

Analysts estimate that the Rumaila field has the potential to produce 17 billion barrels during its lifetime, with Iraq aiming to increase production at the site by 2 million barrels a day.

Business Week