Iraqi Oil Minister Lays Out the Rules

Iraq’s oil minister said Thursday that its national oil company would develop the country’s largest producing fields, including West Qurna, indicating that LUKoil would face a battle in carving out a spot for itself in Iraq’s oil future.

Hussain al-Shahristani did say, however, that LUKoil had a competitive edge over many other companies wishing to work in Iraq because of its previous experience and knowledge of the country.

“We believe LUKoil enjoys some advantages in winning tenders,” Shahristani said after two hours of talks with Industry and Energy Minister Viktor Khristenko.

Shahristani said all foreign companies would have an equal chance at access to Iraqi oil fields, but that the Iraqi National Oil Company would be given preferential treatment and would have exclusive rights to the country’s 27 largest producing fields.
The Iraqi firm can then hire contractors as it sees fit, he said.

West Qurna, a field already under production with estimated reserves of 4 billion barrels, would go to INOC, Shahristani said.

Legislation before the Iraqi parliament would give the rights to already producing or untapped adjacent fields to INOC. Foreign companies would have the right to bid in tenders for entirely new fields.

LUKoil CEO Vagit Alekperov, who returned to Moscow from vacation for the meeting, and Shahristani “discussed joint projects, in particular West Qurna-2,” the company said in a tersely worded statement quoted by The Associated Press. LUKoil was not available for further comment late Thursday.

The Moscow Times