| GEO Business | | Iraq inaugurates oil deal with China's CNPC | Updated at: 1922 PST, Wednesday, March 11, 2009
WASIT, Iraq: Iraq inaugurated an oil project on Wednesday with the Chinese National Petroleum Company (CNPC), activating the country's first major oil deal with a foreign firm since the fall of Saddam Hussein in 2003.
Oil Minister Hussain al-Shahristani joined Chinese officials at the al-Ahdab field in southeastern Wasit province, which should eventually produce 110,000-130,000 barrels of oil a day.
CNPC will operate Ahdab under a contract, initially signed under Saddam, which the Iraqi government renegotiated last year to gain better terms by changing it from the production-sharing agreement reached in 1997 to a set-fee service deal.
The project, while modest in terms of total output, is a milestone for Iraq as it seeks to reinvigorate its oil sector, which offers vast potential but is hindered by the effects of years of sanctions, underinvestment and war.
The government of Prime Minister Nuri al-Maliki is courting top foreign firms in two bidding rounds for long-term service contracts for major oil and gas development fields.
It hopes that, as violence recedes in most parts of Iraq, foreign investors will set aside security concerns and will be drawn by the world's third largest proven oil reserves.
Some industry officials have complained about the terms offered by the government, which wants service contracts rather than the production-sharing deals oil companies prefer. |  |
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