Oct 18, 2009
Iraq okays oil deal
BAGHDAD - THE Iraqi government said on Saturday it has approved a contract with a British-Chinese consortium to develop a prized oil field in southern Iraq, a significant achievement for a country that has struggled to attract foreign investors despite its vast natural resource wealth.
The deal was the only one to emerge from a disappointing bidding round in June offering development rights for six oil and two gas fields.
It was Iraq's first such bidding process in over three decades, but foreign firms felt the prices set by the government were too low given continued violence in the country and disputes over natural resource control. But things have been looking up in recent days for Iraq's hope to use increased oil revenue to recover from years of war and sanctions.
Earlier in the week, three international consortiums agreed to meet the Iraqi government's price to develop oil fields in the country.
Even more important is the Iraqi Cabinet's approval of the bid by Britain's BP PLC and its Chinese partner CNPC to develop the 17.8 billion barrel Rumaila field near Iraq's southern city of Basra.
According to the agreement, BP will hold a 38 per cent stake in the venture and CNPC will have a 37 per cent share. Iraq's State Oil Marketing Organisation will control the rest. -- AP
