BP, CNPC win Iraqi Rumaila oil field development deal

CAIRO, June 30 Kyodo -
BP plc of Britain and China National Petroleum Corp. have won a contract for
the development of Iraq's Rumaila oil field, the first of eight giant Iraqi oil
and gas development projects for which Iraq began receiving bids Tuesday, Iraqi
officials said.
Selected foreign companies including international oil majors and Japanese
companies are making bids.
Iraq is offering contracts to foreign companies for the first time in around 40
years since its energy industry was nationalized. The eight projects involve
six active oil fields, including those in Rumaila and Kirkuk, and two
undeveloped gas fields.
Iraq possesses the world's third-largest proven crude oil reserves of 115
billion barrels and the six oil fields account for roughly one-third.
Iraq plans to boost crude oil production from 2.4 million barrels per day in
2008 to 4 million barrels in 2013 by introducing foreign capital and technology
through the auction in order to secure funds to reconstruct the country.
Besides BP and CNPC, the companies selected to participate in the auction
include Exxon Mobil Corp. of the United States as well as Japan's Nippon Oil
Corp., Japan Petroleum Exploration Co., Inpex Corp. and Mitsubishi Corp.
The auction was initially slated for Monday and Tuesday but was delayed because
of a heavy sandstorm.
Analysts warn there are risks associated with the contracts such as the poor
security situation and inadequate legal system in the country, as well as
domestic resistance to the opening of oil and gas fields to foreign companies.
Iraq plans to auction contracts for 11 untapped oil fields at the end of this
year.
==Kyodo