Iraq oilfield talks collapse

Iraq plans to develop the Nassiriya oilfield on its own after months of talks with a Japanese group led by Nippon Oil Corporation reached a dead end, the head of Iraq's South Oil Company said yesterday.

Nippon and its partners, oil explorer Inpex Corp and engineering firm JGC Corporation had been negotiating the deal since the first half of last year, but a final deal was held up by issues over financing.

"Talks with the Nippon group have reached a dead end, and we will start developing the field through national efforts," Dhiya Jaafar, head of the SOC said in Basra. Jaafar did not give more details.

The largely undeveloped Nassiriya field is listed as having reserves of under five billion barrels. Nippon Oil Corp had projected it could pump up to 200,000 bpd within two years, according to Iraqi officials.

Iraq plans to drill 10 oil wells in Nassiriya this year, Jaafar said. "We are capable of boosting production from Nassiriya from 10,000 bpd to 50,000 bpd by the end of 2010," he said.

Iraq's Oil Ministry has also agreed with foreign oil firms to set baseline production levels for West Qurna Phase One and Zubair oilfields, Jaafar said.

Exxon Mobil and Royal Dutch Shell agreed to a baseline production level at the 8.7-billion-barrel West Qurna Phase One oilfield of 244,000 bpd.

The contract to develop the supergiant oilfield became effective on February 12, he said, without saying when Exxon and Shell planned to pay the $400 million (Dh1.4 billion) signature bonus due to be paid to Iraq within 30 days of that date.

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.

Follow Emirates 24|7 on Google News.