Oil Law and Contract News Update

Below are links to the latest articles on the return of Shell, BP, Exxon, Chevron and Total to Iraq under Technical Service Contracts with alleged preferential status clauses contained.

Photo: Basra 2005 Greg Muttitt, PLATFORM

The six no-bid deals to raise existing oil field production by 600,000 barrels per day are set to be signed imminently. Negotiations have reportedly ended.

A Technical Service Contract is a non-reserves booking contract, ie the companies will not own any of the reserves or control their development or depletion. TSCs are commonly seen amongst Iraq's other oil-rich neighbours such as Saudia Arabia and Kuwait.

However, their execution, for a two year period, is commonly the province of Oil Field Service companies such as Schlumberger.

Photo, Basra 2005, Greg Muttitt PLATFORM

TSCs in a country like Iraq, with arguably the cheapest easy conventional oil left in the world, are not usually used by major International Oil Companies.

So far, no details of the deals have been published.

Here are the highlights so far

From United Press International's Ben Lando:

U.S. Congress calls on Bush to block or cancel Iraq oil deals

Ben Lando, UPI June 24th 2008

U.S. congressional leaders are pressing the Bush administration to block deals to be signed between the Iraqi federal government and the world’s largest oil companies and to cancel deals between the Iraqi Kurdish region and smaller U.S. oil firms.

Click here for the must read article:

http://www.upi.com/Energy_Resources/2008/06/24/Congress_pressing_Bush_to_block_reverse_Iraqi_oil_deals/UPI-10071214341844/

Photo Basra 2005, Greg Muttitt, PLATFORM

Iraq hopes to sign short-term oil deals next month
Tue Jun 24, 2008 5:06pm BST
By Ahmed Rasheed

BAGHDAD (Reuters) - Iraq's oil ministry has finished negotiations with oil majors on six short-term oil service contracts and hopes to sign the deals during the next month, the Oil Ministry said on Tuesday.


Officials had previously said the deals, which are aimed at lifting output at Iraq's largest producing fields by a combined 500,000 barrels a day, would be announced on June 30.


"The oil ministry hopes these service contracts can be signed during the next month," Oil Ministry spokesman Asim Jihad said.
On June 30, Oil Minister Hussain al-Shahristani would announce which producing fields would be open for long-term development contracts, officials added.


In the absence of a long-delayed national oil law, Baghdad has been negotiating the six short-term technical service contracts with foreign oil majors. The deals are worth around $500 million each.

Five of the deals that have been under discussion are with Royal Dutch Shell, Shell in partnership with BHP Billiton, BP, Exxon Mobil and Chevron in partnership with Total.

Iraq has also been in talks with a consortium of Anadarko, Vitol and Dome for a sixth contract.

Click here for the full article:

http://uk.reuters.com/article/oilRpt/idUKL2436536620080624

Iraq to Establish Fourth Oil Company to Exploit Amarah Fields
BAGHDAD (AP) - June 24th 2008

Iraq's Cabinet has decided to establish a new oil state-owned company to manage and develop massive oil and gas resources in the southern oil-rich province of Maysan, the oil minister said Tuesday.The announcement was made as government forces are cracking down on Shiite militias in the Maysan capital of Amarah...

Full article here: http://www.pr-inside.com/iraq-decides-to-establish-its-fourth-r662030.htm

Deals With Iraq Are Set to Bring Oil Giants Back
By ANDREW E. KRAMER
Published: June 19, 2008

BAGHDAD — Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

See full story here: http://www.nytimes.com/2008/06/19/world/middleeast/19iraq.html?_r=1&ref=worl&oref=slogin