Officials at oil companies said on Thursday it is unlikely that Iraq would sign technical support contracts with major oil companies to work in some main fields until summer, a few months late from the date that Baghdad targeted. The agreements aim to increase Iraqi oil production to 500 thousand barrels a day within a year to add more than %20 to the current production of 2.27 million barrels per day. Iraqi Oil Minister, Hussein Al-Shahrastani, expressed his hope last month to sign such contracts in March.
However, executives of oil companies said that negotiators did not discuss details until now or the scope of the work, the financial amounts and relationship with the work of long-term development of fields which major oil companies aspire to work on. Iraqi officials and representatives of major oil companies like B.B, Chevron, Exxon Mobil, Royal Dutch Shell and Total will begin a new round of negotiations on contracts of up to two years in Amman on Friday.
The important oil law which defines the framework of foreign companies is still delayed in Parliament for more than a year, and the improved technical service contracts are only temporary measures aimed at enhancing production until the passing of the law. Despite that big companies want to link service contracts with future participation in the exploitation of the fields before moving forward. Major companies fear that after two years of technical field service they would be overcome by other companies in competitive bidding on long-term contracts. Another concern is whether the coming Iraqi government would respect any relationship established at this time.
A source said that Amman talks on some agreements are closer to completion, but talks with B.B and Exxon Mobil are less advanced. The officials said that B.B is holding talks on the southern Rumaila oil field while Chevron and Total both are looking into the West Qurna oil field and Exxon Mobil is examining Al-Zubayr field; Shell is looking forward to work in the northern Kirkuk field and to participate with B.H.B Billiton in the field of southern Maysan.
It is expected that each of those five agreements would enhances Iraqi oil production by 100 thousand barrels a day.
Another factor will hinder reaching agreements and that is how will companies work and be able to send their staff where there is no security, which will compel them to work through issuing recommendations for Iraqi governmental companies.
The contracts will give the companies a larger role than ever before in managing the maintenance and development projects of the fields. Those companies have provided field studies, technical and training support for those fields for years in an attempt to gain the satisfaction of Baghdad
