News On Iran & Its NeighboursIraqIraq, Iran to sign deal on shared oilfield-Shahristani

Iraq, Iran to sign deal on shared oilfield-Shahristani

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Reuters: Iraq and Iran plan to develop oilfields that straddle their border and Iraq will pump crude to its neighbour’s refineries, deepening commercial ties between the two oil producers, Iraq’s oil minister said on Tuesday. By Mariam Karouny

VIENNA, Sept 12 (Reuters) – Iraq and Iran plan to develop oilfields that straddle their border and Iraq will pump crude to its neighbour’s refineries, deepening commercial ties between the two oil producers, Iraq’s oil minister said on Tuesday.

Iraqi Oil Minister Hussain al-Shahristani told Reuters in an interview that an agreement between Iraq and Iran will be signed in a few months after technicians mark out the common oilfields.

The deal, first explored by Iran and Iraq in the 1970s, entails both countries defining their reserves in the cross-border field and then pumping the crude jointly.

“We have already agreed to the unitisation principles. As soon as the technical people meet and mark the shared field

(with Iran) then we will sign the agreement,” he said.

Shahristani said Iraq would forge similar deals involving oilfields straddling borders with Syria and Kuwait.

The impending deal comes as Iraq’s Prime Minister Nuri al-Maliki visits Tehran for the first time since he came to office five months ago.

After the Iran deal is struck, Shahristani said the two countries would build a pipeline to carry Iraqi crude to Iran’s southern refineries.

“The Iranians said they are even ready to take all their needs for the Abadan refinery from us which is about half a million (barrels a day),” he said. “They want to buy it according to the market price.”

Iranian companies were prepared to build the pipeline in as little as nine months, he said.

Shahristani said Iran also wanted to secure 100,000 bpd of Kirkuk crude from Iraq’s north and more than 100,000 bpd of additional Basra Light crude in the future. Under a deal agreed in August, Iraq will receive refined products in return.

The two predominantly Shi’ite Muslim countries have been looking to strengthen ties, prompting concern among Iraq’s once dominant Sunni minority and other Arab states, as well as in the United States, which has 145,000 troops in Iraq.

Washington, which considers Iran part of an “axis of evil”, accuses Tehran of meddling in Iraq.

INTERNATIONAL OIL FIRMS

Shahristani, in Vienna for a meeting of the Organization of Petroleum Exports Countries, was also briefing international oil companies about the latest developments in his country.

He said Iraq would enter into serious talks with them when parliament passed a new hydrocarbon law to regulate investment. This is expected by year-end.

“Most of the international companies, all of them, are seriously interested in working in Iraq and we welcome them,” the minister said. “As soon as the hydrocarbon law passes parliament we will begin serious discussions with them and I don’t expect they will take a long time.”

Iraq needs to attract investment to develop its oilfields and increase production. Big oil firms are waiting until the new investment code is in place before pumping cash into Iraq’s giant and largely underdeveloped oilfields.

Shahristani said central government was encouraging the regions to attract investment but policymakers were still debating whether they would be able to sign deals.

“We have agreed that the contracts must be approved by a federal authority,” he added.

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