Iraq signs energy exploration deals

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iraq oil contracts
Photo – AFP/Getty Images

Iraq on Monday announced it has signed an initial deal with a Kuwait-led consortium and awarded contract to a Russia-led group to drill for energy, as part of efforts to strengthen its oil production capabilities.

Baghdad is also considering two other deals with international firms to boost its oil reserves and increase production of much-needed gas to gap the country’s power shortfall.

“The representatives of the consortium of three companies have signed the initial contract with the Iraqi oil ministry,” spokesman Assem Jihad said, referring to the consortium made up of Kuwait Energy, Dubai-based Dragon Oil and Turkey’s TPAO.

Iraq on Sunday signed another initial deal with Pakistan Petroleum, and agreed to a preliminary contract with a consortium led by Lukoil last week.

Monday’s exploration contract was for a 900 square kilometre block in the southern province of Basra thought to contain oil, with the three companies agreeing to a remuneration fee of $6.24 per barrel of oil equivalent eventually extracted.

Jihad added that Russia’s Bashneft and Britain’s Premier Oil had joined together to explore an 8,000 square kilometre (3,000 square mile) block which lies across the western desert of Iraq’s Muthanna and Najaf provinces and is believed to hold oil.

The consortium will be paid $5 per barrel of oil equivalent extracted. A consortium including Bashneft had originally bid $9.85 per barrel during the May 30-31 auction.

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