The Iraqi government by the end of the month is expected to revive a contract signed by Saddam Hussein's regime allowing a state-owned Chinese oil company to develop a giant oil field, Iraq's oil minister said Sunday.
"There is an expected meeting between Iraq and China at the end of this month when both sides would sign an initial contract to develop al-Ahdab oil field," Hussein al-Shahristani was quoted as saying in the statement during a meeting with China's ambassador.
"Iraq wants to develop al-Ahdab field in a record time and build a power station near the field," Shahristani told the Chinese ambassador.
China National Petroleum Corp. originally signed a deal with Iraq in 1997 to develop al-Ahdab oil field, which is now one of the first to be offered to foreign investors since the 2003 U.S.-led invasion. The field had an estimated pre-war capacity of 100,000 barrels a day, and the 1997 contract was valued around $1.2 billion.
CNPC couldn't implement the contract at that time because U.N. sanctions, imposed on Iraq between 1990 and 2003, barred direct dealings with Iraq's oil industry.
While Iraq has been reluctant to revive Saddam-era contracts, it apparently has welcomed China as security problems and uncertainties over Iraq draft oil and gas law have deterred other investors.
Iraq and China have started talks to revive the contract since October 2006. They revised commercial terms and price details, Iraqi oil officials said.
CNPC is among the 35 international oil companies qualified by the Iraqi oil ministry to submit bids to develop six of Iraq's giant oil fields. The tender round also included two gas fields.