Iraq is expected to complete the final draft of a multibillion-dollar contract with Royal Dutch Shell and Japan’s Mitsubishi to capture gas being flared in southern oilfields, Iraq’s oil minister told Reuters.
Hussain al-Shahristani said in an interview on Sunday the contract would not include the super giant 12.6-billion-barrel Majnoon oilfield, which is being developed by Shell and Malaysian partner Petronas.
“We expect to finish the contract within a few days now,” Shahristani said, adding that the final draft of the deal was being discussed in the Oil Ministry in consultation with its external advisers.
“If it is approved as it is, we will present it to the cabinet. We have almost finalised the final draft of the contract.”
He said he hoped to sign the deal before the end of the year.
The US$12 billion deal, first agreed with Shell in 2008, involves capturing associated natural gas produced at Iraq’s southern oilfields of Rumaila, currently being developed by BP and CNPC; Zubair, by Eni, Occidental and Kogas; and West Qurna, whose two projects are managed by Exxon and Shell, and Lukoil and Statoil. The agreement excludes the Majnoon field, the oil minister told Reuters.
Iraq flares 1 billion cubic feet of gas every day at its oilfields, a source of energy that could otherwise be used in electricity generation which is something the country desperately needs following years of war and underinvestment.
