Iraq Signs $3.5 Billion Deal for China to Develop Oil Field [View All]

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Source: NYT

By KATHERINE ZOEPF
Published: November 11, 2008

BAGHDAD — North Oil, an Iraqi-owned company, has signed a contract with a Chinese state-owned oil corporation, CNPC, that was first negotiated during Saddam Hussein’s government, an official in Iraq’s Oil Ministry said Tuesday.

The deal is worth $3.5 billion, said the official, Ahmed al-Shamaa, the deputy oil minister. It is the first major oil-development deal that Iraq has made with a foreign company since the American-led invasion in 2003. It will allow CNPC, with Norinco, another Chinese company, to develop the Adhab oil field in Wasit Province, southeast of Baghdad, for 20 years, Mr. Shamaa said in a telephone interview. “It has been the same contract since Saddam’s regime, but we changed it from a production-sharing contract to a service contract,” Mr. Shamaa said. “The contract includes developing the field, digging wells, laying down bibs, delivering crude oil to the national grid, and natural gas processing and delivery” ...

Frank A. Verrastro, director of the energy and national security program at the Center for Strategic and International Studies, said he thought the announcement of the Chinese deal would open the door to the announcement of some of the other oil deals that Iraq has been negotiating recently.

The announcement of a Chinese deal first, rather than a deal with a major Western petroleum company like Shell or Chevron, would send a positive signal, Mr. Verrastro said ...

Read more: http://www.nytimes.com/2008/11/12/world/middleeast/12crude.html?_r=1&ref=business&oref=slogin