Shell gas deal awaiting cabinet approval: minister

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A four-billion-dollar gas production deal with Royal Dutch Shell in southern Iraq has been finalised and is awaiting cabinet approval, Oil Minister Hussein al-Shahristani said on Thursday.

The Anglo-Dutch firm initially signed an agreement with the state-owned South Oil Company in September 2008 to form a joint venture to extract gas from fields near the southern port city of Basra.

"We finished our negotiations with Shell and now we are waiting for cabinet approval to go ahead to sign the contract," Shahristani told reporters.

Shell holds a 44 percent stake in the joint venture, with Japanese firm Mitsubishi making a five-percent investment in the project. The remaining 51 percent is in Iraqi government hands.

The details of the venture were meant to have been hammered out within 12 months of the contract having initially been signed, but in September 2009, oil ministry spokesman Assem Jihad noted that negotiations "can be extended."

Shahristani on Thursday invited international energy firms to submit bids in a September 1 auction of three of its gas fields, in the war-torn country's third major attempt to develop its oil and gas sector.

The Baathist regime that ruled Iraq until the US-led invasion in 2003 threw out foreign oil companies when it nationalised the sector in 1972.

Last year, Iraq handed out 10 contracts to foreign companies to ramp up production at its oil fields.

© 2010 AFP

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