BAGHDAD: Iraq will soon sign its first big international oil deal since the fall of Saddam Hussein, a $1.2 billion oil service contract with China, Oil Minister Hussain Al-Shahristani was quoted as saying yesterday. The deal covers a small field producing just 90,000 barrels per day and replaces an earlier deal signed under Saddam. But the terms described by Shahristani give a clue to the tough line Baghdad is likely to take in deals with other foreign firms.
It replaces a production sharing agreement that would have given a Chinese firm a long-term stake in profits from the Adhab oilfield with a services contract in which the Chinese receive fees for work, but Baghdad keeps the future profits. “We have held talks with (the Chinese) for a year, and the terms of the deal were changed to a service contract. The Chinese have agreed on that, with a value of $1.2 billion,” Shahristani told the an-Noor newspaper.
Foreign firms are keen to have access to the OPEC country’s oilfields, the world’s third largest. But with oil prices high Baghdad has been negotiating from a position of strength, while war has kept firms from setting up a presence in Baghdad.
