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Fusionist
Iraq 'set to invite foreign oil firms'
LONDON: Iraq is preparing to allow foreign companies to exploit its oil reserves, The Independent on Sunday newspaper said, citing a draft law expected to come before the Iraqi parliament soon.
The US government was involved in drawing up the law through a consultancy firm, the British weekly said.
The early draft, circulated in English to oil companies in July 2006 and leaked to the newspaper, would offer oil companies vastly better terms than the industry norm for investing in the war-torn country.
The production-sharing agreements (PSAs) would allow oil giants to sign 30-year contracts for extracting Iraqi oil.
Under PSAs, the state retains legal ownership of its oil but gives a share of the profits to companies that invest in infrastructure and in operating the wells, pipelines and refineries.
The newspaper said that under the draft law, oil companies could recoup 60 to 70 per cent of revenue until initial costs had been recovered, which compares to around 40pc usually.
Following that, oil firms could be allowed to keep up to 20pc of profits, rather than the more usual 10pc, the weekly said, citing experts.
Experts said that oil giants would not descend immediately on Iraq, preferring to wait for the country to regain some level of stability, while only small, maverick producers would risk activity there in the short term.
The draft law would allow for the first foreign exploitation of Iraqi oil reserves since the industry was nationalised in 1972. The introduction of PSAs would also be a first in the Middle East.
http://www.gulf-daily-news.com/Story.asp?Article=166647&Sn=BUSI&IssueID=29294
LONDON: Iraq is preparing to allow foreign companies to exploit its oil reserves, The Independent on Sunday newspaper said, citing a draft law expected to come before the Iraqi parliament soon.
The US government was involved in drawing up the law through a consultancy firm, the British weekly said.
The early draft, circulated in English to oil companies in July 2006 and leaked to the newspaper, would offer oil companies vastly better terms than the industry norm for investing in the war-torn country.
The production-sharing agreements (PSAs) would allow oil giants to sign 30-year contracts for extracting Iraqi oil.
Under PSAs, the state retains legal ownership of its oil but gives a share of the profits to companies that invest in infrastructure and in operating the wells, pipelines and refineries.
The newspaper said that under the draft law, oil companies could recoup 60 to 70 per cent of revenue until initial costs had been recovered, which compares to around 40pc usually.
Following that, oil firms could be allowed to keep up to 20pc of profits, rather than the more usual 10pc, the weekly said, citing experts.
Experts said that oil giants would not descend immediately on Iraq, preferring to wait for the country to regain some level of stability, while only small, maverick producers would risk activity there in the short term.
The draft law would allow for the first foreign exploitation of Iraqi oil reserves since the industry was nationalised in 1972. The introduction of PSAs would also be a first in the Middle East.
http://www.gulf-daily-news.com/Story.asp?Article=166647&Sn=BUSI&IssueID=29294
