Lukoil/Inpex sign Iraq exploration deal

17th July 2012, Comments 0 comments

A consortium led by Russia's Lukoil and including Japan's Inpex signed a preliminary contract with Iraq's oil ministry on Tuesday to explore for oil, a spokesman said.

The deal is the third to be signed by the oil ministry in as many days with foreign firms to explore for oil and gas across the country, with a fourth set to be inked soon, as Iraq looks to ramp up its already-high oil reserves and boost gas production to support its struggling power sector.

"The ministry of oil signed a preliminary agreement with a consortium made up of the Russian company Lukoil and the Japanese company Inpex Corp," ministry spokesman Assem Jihad said in a statement.

Lukoil holds 60 percent of the partnership and Inpex the balance.

The ministry said the contract would be passed on to the cabinet for approval.

In late May, Lukoil and Inpex won a contract for a 5,500 square-kilometre (2,100 square mile) plot covering Muthanna and Dhi Qar provinces in the south, believed to hold oil, with an offer of $5.99 per barrel of oil.

The May 30-31 bid round, the fourth public auction of Iraqi energy contracts since mid-2009, came amid progress in ramping up oil exports, which account for the vast majority of government income, and as Baghdad eyes higher gas production to increase woefully inadequate electricity supplies.

Iraq has proven reserves of 143.1 billion barrels of oil and 3.2 trillion cubic metres (111.9 trillion cubic feet) of gas, both of which are among the highest such deposits in the world.

© 2012 AFP

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