A consortium led by Cnooc Ltd. (CEO), the Hong-Kong-listed unit of China National Offshore Oil Corp., will sign a final deal with Iraq to develop the 2.5 billion-barrel Missan oil field complex in southern Iraq, a senior Iraqi oil ministry official said Thursday.
A consortium led by Cnooc Ltd. (CEO), the Hong-Kong-listed unit of China
National Offshore Oil Corp., will sign a final deal with
Iraq
to
develop the 2.5 billion-barrel Missan oil field complex in southern
Iraq
, a
senior Iraqi oil ministry official said Thursday.
Sabah Abdul Kadhem al-Saadi, director of the legal and commercial office at the
Oil Ministry's Petroleum Contracts and Licensing Directorate, told Dow Jones
Newswires the deal would be clinched following approval by the Iraqi cabinet.
Cnooc and its partner, Sinochem International Corp. (600500.SH), in March
agreed to the Iraqi oil ministry's proposals to develop the three Missan
fields--Fakka, Buzurgan and Abu Ghirab and they signed an initial pact with the
oil ministry in that month.
It isn't known, however, if Sinochem is still interested in the deal. Saadi
said that Sinochem had asked to rejoin the consortium after it decided a few
weeks ago to leave it.
"The ministry has accepted their request to return to the consortium but
if they don't show up on Monday, they won't be allowed to participate any more,"
he said.
Saadi, however, said that the state-run Turkish Petroleum Corp., known as TPAO,
had joined Cnooc to develop the field. "The ministry has agreed to a
request submitted by TPAO to join the consortium led by Cnooc to develop Missan
oil fields," he said without giving further details.
Cnooc set a production plateau target for the oil fields at 450,000 barrels a
day to be reached in six years and accepted the ministry's remuneration fee of
$2.30 a barrel.
The fields are currently producing around 100,000 barrels a day, Saadi said.
The Cnooc/Sinochem alliance made an unsuccessful bid for the complex in the
country's first licensing auction in June. The two Chinese state-run firms
initially offered a remuneration fee of $21.40 for each extra barrel of oil
produced and suggested raising production from the fields to 450,000 barrels a
day. They subsequently lowered the fee to $18.09 a barrel, but that was still
much higher than
Baghdad
's
proposed fee of $2.30 a barrel.
Missan would be the 11th of a series of deals that
Iraq
has
signed with international companies since November in a bid to quadruple the
country's crude oil production, which stands at 2.4 million barrels a day.
It would also make the Chinese oil companies the dominant foreign players in
Iraq
's
promising oil sector, following three big development deals they signed this
year and last year, including the one for the supergiant Rumaila oil field in
partnership with BP PLC (BP).
The Chinese were the only companies that bid last year for Missan oil fields
because other companies were discouraged from bidding for the fields because
some of them are in a disputed area near the border with
Iran
.
In December, Iranian troops occupied an Iraqi well in the Fakka field bordering
Iran
and caused
a political and diplomatic row between the two countries. In February, the
Baghdad
government said that
Iran
withdrew its troops from the field but wanted negotiations to demarcate the
borders.
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