Thursday, 4 September 2008

Iraqi cabinet expects oil proceeds
from al-Ahdab field to hit $55B

Wassit - Voices of Iraq

BAGHDAD, Sept. 3 (VOI) - The Iraqi cabinet expected the total proceeds from developing the al-Ahdab oilfield in Wassit province to hit $ 55 billion for a period of 20 years, or 87% of the total revenues of $ 63 billion, according to a statement by the official spokesman for the Iraqi government on Wednesday.

"The presumptive investment cost to upgrade al-Ahdab oilfield in association with a Chinese company reached three billion dollars while the operational cost was put at four dollars per one barrel before adding 15% tax duties over the contractors' profits," Ali al-Dabbagh said in the statement received by Aswat al-Iraq - Voices of Iraq - (VOI).

Al-Ahdab field, in the al-Ahrar district, (25 km) western Kut city, is one of the uninvested Iraqi oilfields that is, if deveoped, expected to hit 200,000 barrels per day (bpd) in capacity.
Discovered in the year 1979, the oilfield boasts a reserve of 225 million bpd.

The statement quoted Dabbagh as saying that "the 20-year-old service contract provides that the Chinese company shall construct all the surface installations necessary to extract oil and separate and treat gas as well as other reservoirs and facilities".

"In return, the Iraqi side will afford the costs these obligations over annual batches to guarantee fine performance," said Dabbagh.

The Iraqi government spokesman pointed out that the contract to develop al-Ahdab field envisages economic previliges for Iraq compared to the partnership agreement signed during the previous regime's time, as the Chinese company's profits from the total revenues of the project are 4% in the current contract compared to 8% in the previous contract, which saves a sum of $ 2.5 billion for Iraq provided that one barrel of oil is worth $ 100.

Wassit, 180 km south of Baghdad, is in the east of the country. Its name comes from the Arabic word meaning "middle," as it lies along the Tigris about midway between Baghdad and Basra.
Its major cities include the capital, al-Kut, and al-Hayy. Prior to 1976 it was known as Kut Province.

Iraq signs $3billion oil service contract
with Chinese firm

Baghdad - Voices of Iraq

BAGHDAD, Aug.28 (VOI) - Iraq struck $3bn oil services contract with China's state-owned oil firm CNPC, an oil ministry spokesman said on Thursday.

Earlier the Iraqi oil minister Hussein al-Shristani said the two parties renegotiated a 1997 deal to pump oil from the Ahdab oilfield in Wassit, 180 km south Baghdad.

Oil ministry spokesman Assim Jihad pointed out “Under the new deal, output from the oilfield will be 25,000 barrels per day, out of the expected 125,000 barrels, would supply fuel for al-Zubaidiya thermal plant, which is set to begin generating electricty in three years”.

“The deal is the first major oil contract with a foreign firm since the US-led war in Iraq,the spokesman noted.

As security improves, Iraq - which has some of the biggest oil reserves in the Middle East - is trying to bring in foreign oil companies to boost crude output.
It needs billions of dollars of investment after years of war and sanctions.
Other foreign oil companies, such as Royal Dutch Shell and Exxon Mobil, are also negotiating deals with the Iraqi government.

The Iraq government said its aim is to increase crude oil production from the current 2.5m barrels per day to 4.5m by 2013.

Iraqi oil experts put the discovered reserve for al-Ahdab field at 225 million, which is considred one of the largest in Iraq.

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