Thursday, 04 Sep, 2008 Current Events
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China and Iraq Sign Strategic Oil Service Contract

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The largest oil and gas company in Asia, China National Petroleum Corporation, has signed a $3 billion 20-year service contract to develop and manage the oil field of Iraq's al Ahdab.

It is worth mentioning that this is the first major oil agreement made between Iraq and a company from abroad.

Hussain al-Shahristani, the oil minister of Iraq stated that big western companies are running out of time to wrap up the contracts they were negotiating for several years. He also mentioned that both parties involved in the deal had negotiated the terms of an earlier contract on the development of the Adhab oil field, signed in 1997. This contract was modified from a deal on sharing oil production into set-fee service agreement.

The contract stipulates that the production from the oilfield will increase from 90,000 to 110,000 barrels a day. Nowadays Iraq extracts about 2.4 million b/d and the output is expected to increase by 500,000 b/d before the end of 2008.

Source: NEWS Yahoo

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