BAGHDAD (AFP) – Iraq signed a deal with Chinese energy giant CNOOC and Turkey’s TPAO on Monday to develop a major southern oilfield complex, its 11th deal with foreign energy firms as Baghdad aims to boost crude output.
Among the cluster of fields in the Maysan complex, along Iraq’s border with Iran, is a field partially claimed by Tehran, whose forces temporarily took over an oil well in the Fakka oilfield in December for several days but withdrew after talks between the two countries.
“Today is a very important day in the history of Iraqi oil production, with the development of very important fields in Maysan province,” Oil Minister Hussein al-Shahristani said at the contract signing.
“Those fields were put forward in the first auction but no agreement was reached because of the prices that were fixed by the ministry of oil.
“After several contacts with CNOOC and TPAO, a price for exploitation has been agreed.”
CNOOC and TPAO agreed to be paid 2.30 dollars per barrel of oil extracted from the Maysan cluster of fields, which has proven reserves of 2.6 billion barrels of oil.
Under the deal, output is projected to be ramped up to 450,000 barrels per day (bpd), compared to current production of around 100,000 bpd.
The Chinese firm will have an 85-percent stake in the joint venture, while TPAO holds the remaining 15 percent. The Iraqi government will have a 25-percent stake in the overall project.
The agreed deal was worth around a tenth of what was initially requested — CNOOC and Sinochem, another Chinese energy firm, had originally asked for 21.4 dollars per barrel when the field was auctioned to foreign firms last June.
Sinochem has since pulled out of the deal.