Business News - Exxon-Shell awarded Iraqi oil deal

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Exxon-Shell awarded Iraqi oil deal

BAGHDAD (UPI) -- The Iraqi Oil Ministry granted Exxon Mobil Corp. and Royal Dutch Shell the rights to the West Qurna-1 oil field, awarding the contract over two other bids.

Lukoil, a Russian firm, along with ConocoPhillips submitted a bid for development rights, as did CNPC, The Wall Street Journal reported Thursday.

Aside from Occidental Petroleum Corp.'s involvement as a junior partner in a Eni SpA-led proposal granted a contract for oil development in Southern Iraq a week ago, the new deal is the first access to its oil reserves Iraq has given to a U.S. company.

The deal requires approval from the Iraqi cabinet, said oil ministry spokesman Assem Jihad.

In a June auction for the development rights, Exxon originally asked for a $4 per barrel payment, the fee applicable to oil extraction that exceeds current production levels, the Journal said.

Lukoil had asked for $6.49 per barrel, while CNPC was seeking $2.60 per barrel.

In June, the three firms rejected the Iraqi offer of $1.90 per barrel. Since then, all three capitulated and agreed to the terms.

Oil reserves at West Qurna-1 are expected to hold 8.7 billion barrels, the newspaper said.

Copyright 2009 by United Press International

This news arrived on: 11/05/2009

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