The passing of new oil legislation in Iraq is expected to open up opportunities for the Irish oil and gas exploration company Petrel Resources, its executive chairman, John Teeling, said yesterday. Laura Slatteryreports.

The company, which has had a presence in Iraq since 1999, has posted a loss of €415,570 for last year, a reduction on the €481,525 it lost in 2005.

Mr Teeling said that the Iraqi hydrocarbon law, which is expected to pass this year, "recognises the need to develop Iraq's vast oil resources using international technology and capital".

Work is continuing on the development of the Subba and Luhais oilfield in southern Iraq, which is expected to produce 200,000 barrels a day when it comes on stream in 2010. Petrel was awarded the $197 million development contract for the project in 2005.

A technical and geological review of the Merjan oilfield has been submitted to the Iraqi authorities. A further study is likely before work can begin.

In May, Petrel signed a production-sharing agreement with the authorities in Jordan for the development of the 8,750 sq km East Safawi oil and gas block.

The net cash inflows from operating activities there jumped massively last year from just over €1 million to €14.5 million.

Petrel made a loss per share of 62 cent last year compared to 77 cent in 2005. Its net assets as of December 31st stood at €7.3 million, up from €6.9 million.

Oil production costs in Iraq are one of the lowest in the world at less than $2 a barrel.