BAGHDAD (AFP) – Anglo-Dutch energy giant Royal Dutch Shell has agreed a gas joint venture with Iraq worth up to four billion dollars (2.27 billion pounds), the Iraqi oil ministry and the Financial Times said on Tuesday.
The deal, which will see the gas extracted from Iraqi fields being both sold in Iraq and abroad, will be signed next month, ministry spokesman Assem Jihad told AFP.
Shell will become the first Western oil group to sign a deal with Baghdad since the US-led invasion of 2003.
Iraq’s cabinet has agreed to the contract, which gives the state-owned Southern Oil Company 51 percent and Shell 49 percent in the venture.
“Our joint venture partnership is for the long term, because the investment to extract is a long process,” Jihad told AFP.
He had told the FT that Europe was looking for supplies of gas from Iraq.
“Security used to be a deterrent but now companies feel that security has improved and this will encourage others to come in,” he added.
Shell told the FT: “We are delighted with the government’s decision and look forward to signing the agreement in the near future.”
Last month China became the first foreign group to reach an agreement with Iraq in a three billion dollar deal to exploit oil that revived a 1997 contract granting China rights to develop the Al-Ahdab oil field in central Iraq.