Exxon and Lukoil fight over Iraq oil field

Iraq Oil Fields

Competing consortiums led by US energy giant Exxon Mobil and Russia's Lukoil have submitted bids that meet conditions for a major southern Iraqi oilfield, the country's oil minister, Hussein al-Shahristani, said today.

Both groups have agreed to be paid 1.9 dollars per additional barrel that they extract from West Qurna 1 on top of current production, al-Shahristani told reporters in Baghdad.

"After a major effort from the oil ministry, our price was accepted, which is 1.9 dollars per additional barrel," he said.

He added, "two consortiums accepted the price - Exxon Mobil, which proposed an additional 2.1 million barrels a day, and Lukoil, which offered 1.5 million barrels a day.

"Iraq has an opportunity to go ahead and sign this contract with Iraqi conditions."

Shahristani said that a decision would probably be made between the two consortiums within the next two weeks.

West Qurna 1 produces around 279,000 barrels of oil per day and has reserves of around 8.5 billion barrels, according to oil ministry figures released earlier this year. Exxon Mobil's are working with Anglo-Dutch energy firm Shell on the deal, while Lukoil is partnering with US-based ConocoPhillips.

Iraq originally offered eight oil and gas fields to foreign energy companies at an auction in June - which was partly disrupted by social and political unrest within the country - but only Britain's BP and China's CNPC reached an agreement with Baghdad at the time.

Iraq is in a real hurry to attract foreign investment so its economy can recover and social stability can be restored as soon as possible. There is a lot of money to be made from such oil fields as those surrounding the northern Kurdish region of Iraq, but until stability is achieved Iraq does not present a sound or safe investment.

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