CNPC in Iraq looking for old oil deal

March 9, 2007 at 12:39 PM
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BAGHDAD, March 9 (UPI) -- Officials from the China National Petroleum Corp. are in Iraq trying to re-sign a major oil deal first signed with Saddam Hussein.

Assem Jihad, a spokesman for the Iraqi Oil Ministry, said CNPC representatives had been in country since Tuesday.

Their goal is to renegotiate a contract for the al-Ahdab field, which China won the exploration rights to 10 years ago.

CNPC expects to attain the field rights again, reports China Oil News, a news service owned by CNPC.

The al-Ahdab contract was for $700 million of the 23-year expected lifespan. CNPC would produce 90,000 barrels per day.

Work was halted, however, by U.N. sanctions and other security issues.

But Iraq is closer to finalizing a law governing oil and natural gas developments in the country, which could pave the way for contract terms for CNPC.

Other companies, like Russia's Lukoil, are attempting to re-sign contracts from the Hussein era.

The law is controversial and faces opposition from Iraq's oil unions and others who view it as too gracious to foreign companies.

Details still to be worked out could also be held up by bickering factions in the central government and by regions wanting more secured terms.

Iraq has 115 billion barrels of proven oil reserves, though production of oil has been slowed by the ongoing war and violence.

Production averaged around 2 million bpd last month.

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