Talks between Iraq and BP are continuing for a short-term oil service contract, a senior BP executive said yesterday, after a US diplomat in Baghdad cast doubt on such deals earlier this week.
Iraq and major international oil companies have been negotiating six short-term technical service contracts, each worth about $500m (£268.24m)and aiming at a 100,000 barrels per day (bpd) increase in output from six of Iraq's biggest oilfields.
Pr
esident of BP's Middle East and South Asia exploration and production unit Steve Peacock said: "As far as we are concerned, negotiations continue over the technical service contract."
The co-ordinator for Iraq's economic transition at the US embassy in Baghdad, Charles Ries, has said that Iraq's government may drop all of the contracts. Iraq had aimed to sign the deals in June, but disagreement over payment terms and other issues delayed them.
Baghdad asked the companies involved to revise their proposals and shorten the contracts to about 12 to 18 months last month as talks dragged on.
The Iraqi oil ministry wants to sign longer-term contracts to develop its giant fields by the middle of next year, and wants to avoid overlap between the different deals.
Other companies involved in negotiations are Royal Dutch Shell; Shell in partnership with BHP Billiton; Exxon Mobil; Chevron with Total and a consortium of smaller firms, Anadkaro, Vitol and Dome.
Anadarko has already dropped its plans, as it found the terms unattractive. The oil companies, jostling for years to position themselves for access to the world's third-largest oil reserves, had hoped that the contracts would give them a headstart in talks for future deals. The contracts have attracted criticism due to the lack of transparency in choosing the companies. There was no bidding round.
Iraq's dilapidated energy sector needs huge investment after years of sanctions and war.
The country exports about 2 million bpd of oil.
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