A Saddam-era oil deal with China is expected to revive next month, Oil Ministry says
The Associated PressPublished: March 6, 2008
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BAGHDAD: Iraq and China are close to wrapping up negotiations on a US$1.2 billion oil contract that was originally agreed to in 1997 under Saddam Hussein's government, an Oil Ministry official said Thursday.
State-owned China National Petroleum Corp. signed the deal to develop the billion-barrel al-Ahdab oil field in the midst of U.N. sanctions that barred direct dealings with Iraq's oil industry.
Beijing was waiting for sanctions to end when the U.S. invasion in 2003 overthrew Saddam's government. The two countries restarted talks in October 2006.
"We are expecting that the next round of discussions, due to be held in April, will finish the negotiations," the official told The Associated Press on condition of anonymity as he was not authorized to release information.
According to the official, the Iraqi government presented proposals to amend the original production-sharing contract, with the country's new oil and gas law has bogged down in parliament.
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"If they (CNPC) are ready to work, then they will sign the contract," added the official who declined to discuss his ministry's proposals.
The official added that the presence of Wasit province governor, where al-Ahdab oil field is located, in last week discussion that held in Amman, Jordan, "was very important as he assured them about the protection Iraqi security forces can offer in case they want to start working."
Wasit, about 160 kilometers (100 miles) southeast of Baghdad, has been the scene of sporadic attacks since the U.S.-led invasion in 2003.
Iraq is planning to increase crude oil output to 3 million barrels a day by the end of 2008 from the current 2.5 million barrels a day by employing foreign companies' expertise as security improves.
The war-torn country also is targeting production of 4.5 million barrels a day by end of 2013. Iraq sits on the world's third-largest oil reserves, totaling more than 115 billion barrels.
On Wednesday, another oil official said that Iraq's Cabinet has given the nod to the Oil Ministry to sign agreements with international oil companies to help increase the nation's crude output.
The two-year deals, known as technical support agreements, or TSAs, are designed to develop five producing fields that would add 500,000 barrels per day to the country's 2.4 million barrels per day output.
