Iraq hints oil-production deals on way

Iraq's oil ministry has finished negotiations with oil majors on six short-term oil service contracts and hopes to sign the deals…

Iraq's oil ministry has finished negotiations with oil majors on six short-term oil service contracts and hopes to sign the deals in the next month, the Oil Ministry said today.

Officials had previously said the deals, which are aimed at lifting output at Iraq's largest producing fields by a combined 500,000 barrels a day, would be announced on June 30th.

In the absence of a long-delayed national oil law, Baghdad has been negotiating the six short-term technical service contracts with foreign oil majors. The deals are worth around $500 million each.

Five of the deals that have been under discussion are with Royal Dutch Shell, Shell in partnership with BHP Billiton, BP, Exxon Mobil and Chevron in partnership with Total.

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Iraq has also been in talks with a consortium of Anadarko, Vitol and Dome for a sixth contract.

"Talks with the six major oil companies are over. Now the licensing and contracts office in the ministry is preparing to receive the bids ... to check them. Then the oil ministry will refer these to the cabinet for approval," an Oil Ministry spokesman said.

Iraq's cabinet agreed a draft oil law in February last year, but it has failed to get through parliament partly because of rows between the Kurdistan Regional Government and Baghdad over who will control oil reserves and contracts.

A key source of tension has been contracts the KRG has signed with foreign energy firms. The Oil Ministry in Baghdad has called the deals illegal, but the KRG says they are constitutional.