Total, Chevron to team up on Iraq bid

BAGHDAD, Aug. 9 (UPI) -- Oil giants Total and Chevron will couple their resources in an eventual bid for oil projects in Iraq.

The Times Online reports the French and U.S. companies, respectively, are writing plans for the Majnoon oil field, the country’s fourth largest.

It is unclear whether the Iraqi government recognizes an older deal with Elf, now part of Total, signed during the Saddam Hussein regime. If so, the company will likely not have to bid on the project, just renegotiate terms to comply with a federal oil law, which has not been approved.

China has been granted such status; Lukoil, a top Russian firm, had a contract with Hussein that was canceled in 2002. The company says it should stand, but Iraqi officials don’t.

Total and Chevron aren’t commenting, but the Times Online reports industry sources confirmed representatives had met with Iraqi officials to discuss a service agreement.

Iraq has 115 billion barrels of proven reserves and much more expected when the country is fully explored. But an oil law governing how, if at all, foreign companies are allowed into the sector is far from approval. The Parliament is split on the issue while the government of Prime Minister Nouri al-Maliki struggles to maintain a governing coalition.

The only foreign companies to have signed any new deals with Iraq are small outfits, all in the Kurdistan Regional Government's zone. The KRG, a semi-autonomous region, is pushing forward with its own law as Baghdad is delayed. This move has irked the federal government.