Iraq Energy Roundup

Royal Dutch Shell looks to Iraq.

Royal Dutch Shell is looking to invest in Iraqi oil to offset losses in the volatile Niger Delta region as its spending goals for 2009 increase.

Royal Dutch Shell Chief Executive Jeroen van der Veer said the company planned to spend $36 billion on drilling and other projects for 2009, The Daily Telegraph reported. Rebel activity in the Niger Delta has cost the oil supermajor around 195,000 barrels per day.

Van der Veer said long-term investment strategy will consider regions "with an acceptable fiscal risk."

"For example, our progression in Iraq is subject to the security situation, but we are keen to make progress there. Nothing is signed yet, as many of the details take time to work out, but we are in active negotiations," he said.

Dana, Crescent to develop Kurdistan Gas City.

Dana Gas and Crescent Petroleum said development of the northern Iraqi Khor Mor gas field could produce 5.3 billion cubic feet of natural gas per day.

The companies, both based in the United Arab Emirates, said they could boost production from a $650 million processing plant in the region to 1.1 trillion cubic feet of natural gas by 2009, Middle East Business Intelligence reported. The gas would supply power plants in Erbil and Sulaymaniyah provinces.

Kurdish lawmakers say development at the Khor Mor field will save more than $2 billion in annual energy costs.

Dana and Crescent also said they would develop a $3 billion, 461 million-square-foot Kurdistan Gas City complex in the region, the Iranian Press TV reported.

"The Kurdistan Gas City is an enormous step as we work towards strengthening the Iraqi economy and bettering the livelihoods of the Iraqi people," said Dana Gas chief Hamid Jafar.

The complex, which will bring more than 200,000 jobs to the Iraqi people, will include commercial and residential sites as well as 20 petrochemical and manufacturing plants.

Western oil majors cautious about Iraqi service contracts.

Western oil firms may hold back on investing in service contracts in Iraq currently under negotiations with the country's oil minister, officials said.

Oil majors say they may not embrace oil service contracts unless government officials guarantee development contracts or preferential deals in the future, Iraqi daily newspaper Azzaman reported.

Iraqi officials said they could boost production in the country's oil fields quickly, but the willingness of major oil firms to service those fields, the report says, remains in doubt.

Citing unnamed officials in the Oil Ministry, Azzaman said Western oil firms may balk on major oil contracts while the hydrocarbon law remains stalled in the Iraqi Parliament.

If the deals go through, Iraq could bring another 1.5 million barrels of crude to the market per day, but the lack of legislation makes any development contracts technically unconstitutional.

Iraq hawk Perle examining Kurdish oil.

Richard Perle, former Defense Policy Board chairman and an architect of the war in Iraq, is examining oil contracts in Iraqi Kurdistan, documents suggest.

Perle, a policy expert for the U.S. Defense Department who lobbied strongly for the ouster of Iraqi dictator Saddam Hussein, recently approached representatives from the Kurdistan Regional Government regarding oil fields near Erbil, The Wall Street Journal reported.

Perle approached KRG officials and other interested parties regarding the K18 tract in Erbil. The Turkish consortium AK Group International is pursuing drilling rights in K18. Officials from Kazakhstan, with whom Perle also has ties, are named in The Journal as potential backers of the deal.

K18 would be operated by Endeavor International, based in Houston. The field holds an estimated 150 million barrels of oil.

Oil contracts in the Kurdish region have been developed at the ire of officials in Baghdad, who view the contracts as illegal while Iraqi lawmakers hammer out a national oil law.

A spokesman for the Kurdish governmental representative to the United States, Qubad Talabani, said Perle had approached the representatives from the KRG. A statement from Talabani said one of his responsibilities "is to seek out potential investors for our new, growing economy in Iraqi Kurdistan as well as respond ... to all legitimate requests for investment information," The Journal said.

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