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Iraq reaches $53 billion initial deal with ExxonMobil, PetroChina: PM Abdul-Mahdi DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Iraq reaches $53 billion initial deal with ExxonMobil, PetroChina: PM Abdul-Mahdi

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Iraq reaches $53 billion initial deal with ExxonMobil, PetroChina: PM Abdul-Mahdi Empty Iraq reaches $53 billion initial deal with ExxonMobil, PetroChina: PM Abdul-Mahdi

Post by RamblerNash on Wed May 08, 2019 11:28 pm

Iraq reaches $53 billion initial deal with ExxonMobil, PetroChina: PM Abdul-Mahdi

Iraq reaches $53 billion initial deal with ExxonMobil, PetroChina: PM Abdul-Mahdi 443840Image1

By Rudaw 14 hours ago

ERBIL, Kurdistan Region — Iraq reached an initial agreement with mega firms ExxonMobil and PetroChina for the production of oil and natural gas and for the provision of water in Basra, Iraqi Prime Minister Adil Abdul-Mahdi has announced.

“We have made a deal with ExxonMobil and PetroChina to develop Artawi and Bin Umar fields ... in addition to the extraction of [natural] gas and all local logistics. It is in essence an economical mega-project. A $53 billion deal is a tall order but it is significant for the economy,” Abdul-Mahdi told journalists during his weekly press conference that aired late on Tuesday.

Abdul-Mahdi added that the 30-year-long terms of the deal mean profit sharing due to fluctuating oil prices needs to be agreed upon by the three parties before it is signed.

Yazan Mash’an al-Jabouri, the son of Iraqi MP Mash’an Jabouri, claimed on Twitter on May 4 that the US waiver for “Iraq on sanctions against Iran will be renewed if it [Iraq] signs the investment [natural] gas deal with  ExxonMobil before June 14.” Iranian Ambassador to the UK Hamid Baeidinejad appeared to back up the claim by Jabouri retweeting it.

The Iraqi prime minister denied any links between the mega project and US sanctions on Iranian oil exports. Exxon Mobil is a multinational oil and gas corporation headquartered in the United States. It has yearly revenues which exceed $279 billion.

He instead referenced the Southern Iraq Integrated Project (SIIP), a project for which talks were initiated in 2015 to increase oil production at the Artawi and Bin Umar oilfields in Basra to 500,000 barrels of oil per day (bpd). 

The project lost momentum under Haider al-Abadi, but was prioritised by Oil Minister Thamir Ghadhban upon his appointment in September 2018. Wider investment has taken place in order to develop oilfields in oil-rich Basra, with the Iraqi oil ministry allocating more than $5 billion in investments there earlier this year.

The deal will increase oil production at both Artwin and Nahr Umar oilfields from 100,000 to 125,000 bpd, totaling more than 500,000, according to Abdul-Mahdi.

“Iraq will receive about 88 percent of [the profit] from the project in 30 years, which is about $400 billion. Discussions are being held on how the additional profits will be distributed,” he said.

ExxonMobil and PetroChina will also establish a water injection project to provide water for the oil wells, “as the production of a barrel of oil requires many barrels of water,” explained the premier.

Basra province has seen waves of protest in recent years, culminating in mass demonstrations last summer. Suffering from mass unemployment, a lack of access to clean water and intermittent electricity access, protestors demanded basic services and jobs. Abdul-Mahdi's predecessor, Haider al-Abadi, responded to those protests by promising increased jobs for locals, while also sending in federal forces to quell the riots.

While Abdul-Mahdi said this new project will be "for the benefit of Iraqis" and a source of job opportunities, it is unclear whether these jobs will go to Iraqis, given many foreign staff are employed across Iraq’s oil sector as laborers and engineers among other job positions.

This initial deal follows another initial infrastructural agreement signed by Abdul-Mahdi during his first trip to Germany on April 30 — a $14 billion memorandum with Siemens, aiming to improve the country’s electricity grid.

Abdul-Mahdi said on Tuesday that the agreement with Siemens “is the first time Iraq is able to reach such a deal with a big company,” which was contracted in order to “draw up a masterplan for electricity.”

Iraq is second only to Saudi Arabia among OPEC members in terms of oil exports. OPEC's members had agreed not to increase oil production individually. Iraqi Oil Minister Ghadhban said in Qatar this week that his country “respects” the OPEC decision.

Iraq has a population of more than 40 million, according to the US CIA World Factbook and is climbing by approximately 1 million people per year. The growing population puts a tremendous strain on the country’s services and jobs sectors.

Iraq is seeking to avoid a regional tug-of-war between perceived US and Iranian interests. 


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