Oil companies agree to changes in Iraq deals01 January, 2010
Global oil firms negotiating multi-billion-dollar oilfield deals with Iraq have agreed to legal and technical changes to their contracts, the Iraqi government said yesterday.
"The ministry discussed the amendments with the companies yesterday and all the winning companies from the first and second rounds have agreed to the changes," an Oil Ministry official said in a statement.
The statement said the cabinet would vote on the amended contracts - which already have been initialled by the firms - next week.
Once approved, the deals will mark a milestone for Iraq as it seeks to transform its moribund oil sector and catapult itself to major producer status. Iraq has the world's third largest oil reserves but is only the 11th largest producer.
The deals include some of the nation's biggest fields, including the Majnoon and West Qurna fields, each of which contain reserves of more than 5 billion barrels. Nine deals for fields offered in two bidding rounds must still be finalised, including with major energy firms like ExxonMobil, Royal Dutch Shell and Lukoil.
In the last two weeks, Iraq has signed initial agreements for seven of the nine pending deals.
In a statement, the cabinet said the changes to the draft contracts included "legal, operational, administrative and sovereignty issues".
"They will advance the interests of Iraq and harmonise (the contracts) with Iraqi laws and legislation. They will not damage investor interests, and reaching a model contract will help the companies comply with the principles of justice, transparency and objectivity," the statement said.
Ali Al Alaq, secretary-general of the cabinet, said one of the proposed changes would give the oil ministry the right to impose ceilings on oil production based on size of fields.
Gulf Daily News -
