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Total close to sealing Iraq deal



By Upstream staff 

French producer Total is in the final stages of talks with Iraq for an oil service contractcompany boss Christophe de Margerie said today.

Iraq could pay up to $500 million for each of the five service contracts it is negotiating with major oil players, an Iraqi government advisor said last month. Iraq wants oil majors to boost its output by nearly a quarter through the contracts.

"I know discussions are being finalised, but I don't have a date for an announcement," de Margerie told Reuters on the sidelines of an oil conference in Paris. "This is up to the Iraqi authorities."

BP, Shell and ExxonMobil are also negotiating for the two-year technical support contracts. BP said earlier this week it expected to seal the deal around mid-year.

The contracts do not provide the long-term involvement the oil majors crave in Iraq's oil sector, but will give them a head start in bids for future oil deals.

"These are contract services," de Margerie said. "This is necessarily a transitory stage, not a proper way to work over the long term."

Total was negotiating for the development of the West Qurna field along with US supermajor Chevron, he said.

The service contracts are part of stop-gap measures to boost output in the absence of new legislation for foreign investment. Political feuding has stalled a vital oil law in Iraq for more than a year.

De Margerie said he was pleased a state-owned Chinese investment fund had bought shares in the company. The move to take a stake was not linked to projects in China, he said.

He said he hoped funds from other countries where Total is active, in particular Gulf countries, would invest in the French group.

"We have a strategy to diversify our shareholder base. We would like funds to come from countries where we have long-term relationships. This is why, besides China, we would like to have equivalent partnerships coming from certain Gulf countries."

Total's shareholders already include state-owned investment funds from Norway, Singapore and the Middle East, a Total spokeswoman said last week.

Thursday, 10 April, 2008, 12:15 GMT  | last updated: Thursday, 10 April, 2008, 12:15 GMT

Man with a plan: Christophe de Margerie
 

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