Getting ready to turn the taps: Local officials OK Rumaila deal.
Locals sign off on Rumaila deal
Local politicians from Iraq's southern oil hub of Basra have said they are pleased with a draft deal to develop the Rumaila oilfield after reviewing plans at a meeting with officials from BP and China National Petroleum Corporation (CNPC).
The BP-led group won the right to develop Rumaila at an energy auction last month in Baghdad, the first chance since the US-led invasion in 2003, a Reuters report said.
Representatives from the companies met with members of Basra's provincial council in a gathering hosted by Oil Minister Hussain Shahristani in Baghdad to discuss the 20-year development contract for Rumaila, council members told the news agency.
"Today, we are 90% satisfied the contract will benefit Iraqis. There's none of the ambiguity we had feared would stain it," Waleed Hameed Qitan, a council member who was one of three delegates sent by Basra's provincial council to observe at the Baghdad meeting, told Reuters.
Basra politicians have been wary about the BP deal, expected to bring the field's output from around 950,000 barrels per day to 2.85 million bpd, and asked Prime Minister Nuri Maliki to ensure them a role in talks with foreign companies.
Earlier on Wednesday, a BP source said it may be difficult to meet an August deadline to sign the contract for Rumaila, the only deal awarded in the 30 June auction that put a total of eight fields on the block.
The company already requested an extension last week to a 15 July deadline to submit a plan to redevelop the field.
The Iraqi government hopes foreign investment will update its promising but underproducing oil sector and help boost output to around 2.5 million bpd.
Shahristani has faced wide and varied opposition from many quarters, including parliament, unions and even members of Iraq's state-run oil industry.
Such opposition is seen as only adding to the risk global players face in doing business in Iraq, where violence continues and where a murky legal and regulatory environment raises fears about longevity of contract terms.
There is even an ongoing feud over whether current law requires Shahristani to submit such deals to parliament. He contends they do not, but some oil and gas committee members are vowing to block the deals if he does not yield.
Nevertheless, the chance to pump oil in Iraq, whose reserves may be even larger than currently estimated, is appealing.
Many Iraqis, especially those who living near oil and gas fields, fear the government will squander oil riches by signing up to ill-conceived contracts or, worse, allow foreign companies to walk away with the country's most precious resource.
Such oil nationalism runs deep in Iraq, where Saddam Hussain nationalised the industry and kicked out foreign producers in 1972.
"We left the meeting today convinced that the Iraqi government is sincere, has a strong nationalist sentiment and is determined to get the maximum benefit from this contract," Besma al-Selemi, another local council delegate, told the news agency.
"We have came to the conclusion that we should go ahead with these contracts."