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Royal Dutch Shell’s long-awaited $17 billion gas deal in Iraq has been submitted to the Iraqi cabinet for approval, according to Reuters.
Bill Lehane and news wires 12 September 2011 14:20 GMT
Speaking on the sidelines of yesterday’s energy summit in the Jordanian capital Amman, Iraq’s oil minister Abdul-Kareem Luaibi said his government’s energy committee had approved the deal.
Luaibi added he saw no outstanding issues with the final draft of the deal, which was initialled by the country’s state-run South Gas Co in July in what was hailed a breakthrough step.
"There are no problems ... We solved all the disagreements after we used three consultants", Luaibi said.
However, the minister declined to provide a timetable for signing a final deal, Reuters said.
The draft agreement with Shell and Japanese group Mitsubishi allows the two companies to capture associated gas flared at three major southern oilfields.
The Shell project aims to capture more than 700 million cubic feet per day of gas being burnt off at the three fields - Rumaila, Zubair and West Qurna 1.
The three fields are producing 1.05 billion cubic feet per day day, but only 450 million cubic feet per day is utilised while the rest is flared.
The Anglo-Dutch supermajor and Mitsubishi have teamed up with the Iraqi government to form a joint venture known as Basra Gas Company, which will operate the deal.
Luaibi said under the deal Iraq was committed to supply the venture with 1.6 billion cubic feet of gas per day, much less than the production of associated gas from the three oilfields in the long run.
Iraq is home to 112 trillion cubic feet of gas, but produces only around 1.5 billion cubic feet per day – of which 700 million cubic feet per day is burned for lack of infrastructure.
The plans are seen as a vital part of Iraq's efforts to boost electricity production and cope with a rapid rise in associated gas output as the country embarks on one of the biggest oil development programmes in history.
But the deal has faced repeated delays and political opposition in the past since an initial deal was struck in 2008, due to a lack of modern oil and gas laws in Iraq and discussions over how much of the gas can be exported.
Luaibi said the joint venture will save Iraq billions of dollars, giving an example of the crude currently being burnt to generate electricity for the power starved nation. He said it would generate around $31 billion for the government.
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Bill Lehane and news wires 12 September 2011 14:20 GMT
Speaking on the sidelines of yesterday’s energy summit in the Jordanian capital Amman, Iraq’s oil minister Abdul-Kareem Luaibi said his government’s energy committee had approved the deal.
Luaibi added he saw no outstanding issues with the final draft of the deal, which was initialled by the country’s state-run South Gas Co in July in what was hailed a breakthrough step.
"There are no problems ... We solved all the disagreements after we used three consultants", Luaibi said.
However, the minister declined to provide a timetable for signing a final deal, Reuters said.
The draft agreement with Shell and Japanese group Mitsubishi allows the two companies to capture associated gas flared at three major southern oilfields.
The Shell project aims to capture more than 700 million cubic feet per day of gas being burnt off at the three fields - Rumaila, Zubair and West Qurna 1.
The three fields are producing 1.05 billion cubic feet per day day, but only 450 million cubic feet per day is utilised while the rest is flared.
The Anglo-Dutch supermajor and Mitsubishi have teamed up with the Iraqi government to form a joint venture known as Basra Gas Company, which will operate the deal.
Luaibi said under the deal Iraq was committed to supply the venture with 1.6 billion cubic feet of gas per day, much less than the production of associated gas from the three oilfields in the long run.
Iraq is home to 112 trillion cubic feet of gas, but produces only around 1.5 billion cubic feet per day – of which 700 million cubic feet per day is burned for lack of infrastructure.
The plans are seen as a vital part of Iraq's efforts to boost electricity production and cope with a rapid rise in associated gas output as the country embarks on one of the biggest oil development programmes in history.
But the deal has faced repeated delays and political opposition in the past since an initial deal was struck in 2008, due to a lack of modern oil and gas laws in Iraq and discussions over how much of the gas can be exported.
Luaibi said the joint venture will save Iraq billions of dollars, giving an example of the crude currently being burnt to generate electricity for the power starved nation. He said it would generate around $31 billion for the government.
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