The Iraqi Council of Ministers plans to approve an initial agreement with Italy's Eni SpA (E) to develop the giant Zubair oil field in southern Iraq next week, the country's Prime Minister Nouri al-Maliki said Tuesday.
The Iraqi oil ministry last week signed two initial agreements, one with Eni for Zubair oil field and the second with Exxon Mobil Corp. (XOM) and Royal Dutch Shell PLC (RDSA) to develop the West Qurna-1 oil field in southern Iraq.
Maliki made no mention of the initial deal signed last week with Exxon Mobil and Shell in his news conference in Baghdad following a regular cabinet meeting.
A spokesman for the Iraqi cabinet said none of the two draft deals was approved in Tuesday's cabinet meeting.
The cabinet will approve the initial deal with Eni on Nov. 17, Maliki said.
He said the Zubair's deal was postponed because there were some legal issues in the text of the deal that needed to be clarified by the legal office of the prime minister and the oil ministry.
Eni, Italy's biggest energy company by market value, and its partners Occidental Petroleum (OXY) and Korea Gas Corp. (036460.SE) of South Korea clinched the initial agreement with the Iraqi oil ministry to develop Zubair oil field Nov. 2.
A consortium led by U.S. oil company Exxon and Shell on Nov. 5 signed an initial 20-year agreement with Iraq to develop the West Qurna-1 field.
Both draft contracts have been submitted to the Iraqi Council of Ministers for final approval.
However, Maliki said any oil deal signed with international companies will be recognized by the next Iraqi government. Iraq plans to hold general elections in January.
Oil Minister Hussein al-Shahristani Tuesday defended his ministry's performance in front of Iraqi lawmakers, who accused him of failing to boost the country's crude oil production despite investing up to $8 billion over three years. Iraq is producing 2.45 million barrels a day, compared with the pre-war level of about 2.8 million barrels a day.