Iraq woos European oil firms

Iraq is courting European oil investors to help spur development of the country's massive reserves before Washington hands over power, a senior Iraqi official has said.

    The industry is dilapidated after years of sanctions and war

    As part of the process, new Iraqi Oil Minister Ibrahim Bahr al-Ulum will insist multinationals help train Iraqi engineers - finally free of more than a decade of United Nations sanctions - to international standards.
     
    "We met a number of European companies after the OPEC meeting and invited them to present their thoughts on how to develop the oil industry of Iraq," said Nabil Musawi, a member of Iraq's OPEC delegation, on Monday.
     
    An Iraqi delegation attended OPEC's 24 September meeting in Vienna.

    "Dr Ibrahim's idea is to get some social development projects injected into the process ... and one of the main areas is training Iraqis outside Iraq."

    Preference for US
     
    European majors will be encouraged by Iraq's informal overtures, but Musawi, a deputy on Iraq's US-backed Governing Council, has said US firms may be given preference in Iraq's oilfields, home to the world's second largest reserves.

    Musawi declined to name the companies whom Ulum met in recent days. But under the rule of Saddam, major European firms had their sights set on some of Iraq's biggest oilfield prospects.

    Fires caused by anti-US attacks
    have stalled sector's revival

    France's Total spent years negotiating for Majnoon and Bin Umar, Italy's ENI and Spain's Repsol had shown interest in Nassiryah and Royal Dutch/Shell had its eye on Ratawi. But multibillion dollar deals for those prized gems would only be signed after an elected government was in place, said Musawi.

    The Governing Council instead is likely to focus on short and medium term projects that will require $2 billion of investment in the early stages.

    Much-needed cash

    The initial influx of cash will boost output in Iraq's dilapidated oil sector to 3.5 to four million barrels daily by end 2005 from 1.8 million now.

    A post-war breakdown in law and order is keeping the world's top oil companies out of Baghdad, but the Iraqi official said some potential investors were undeterred by the violence.

    "They have to be here to get involved," said Musawi. "Quite a number of companies are on the way or are already here to make their presentations."
     
    A senior Iraqi oil official said foreign oil companies might be invited to Baghdad for an official conference in December.

    SOURCE: Reuters


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