1. Latest News
  2. Submit Press Release
  1. PR Home
  2. Latest News
  3. Feeds
  4. Alerts
  5. Submit Free Press Release
  6. Journalist Account
  7. PRNewswire Distribution

Iraq Makes Shell Deal - Corolla Financial Report

Iraq has agreed a final $17bn (£11bn) deal over 25 years with Royal Dutch Shell and Mitsubishi to capture flared gas at southern oilfields.

 
PRLog - Nov. 30, 2011 - Iraq has agreed a final $17bn (£11bn) deal over 25 years with Royal Dutch Shell and Mitsubishi to capture flared gas at southern oilfields. The joint venture, which includes Iraqi state South Gas Co., is expected to help Iraq make use of more than 700 million cubic feet a day of gas that is being burned and help generate much-needed electric power. The 25-year contract is one of the biggest deals that Iraq has signed with international energy companies over the past two years as the country rebuilds its oil and gas industry after years of sanctions and war followed by the U.S.-led invasion in 2003 that ousted Saddam Hussein. Shell Chief Executive Officer Peter Voser, Mitsubishi Senior Vice President Tetsuro Kuwabara and Iraqi Oil Minister Abdul Kareem Al-Luaibi signed the agreement to save and produce gas that is currently flared off in southern Iraq. Iraq holds the fifth-biggest gas reserves in the Middle East and wants to produce more as fuel for power stations, which have been unable to meet domestic demand since the invasion. Al-Luaibi said the country hopes eventually to export gas.

The new venture will be called Basra Gas Company, with Iraq holding a 51% stake, Royal Dutch Shell's 44% and Mitsubishi 5%. As well as providing for domestic energy, there may also be options for gas exports. Iraq sits on top of 143.1 billion barrels of crude oil and 126.7 trillion cubic feet in gas reserves. The 25-year project is meant to help harness more than 700 million cubic feet per day of gas being burned off at southern fields and will ultimately handle 2 billion cubic feet per day. OPEC member Iraq has signed a series of deals with foreign oil companies to modernise its energy industry after years of war and economic sanctions. Its official goal to raise production capacity to 12 million bpd by 2017 would vault it into the top echelon of global producers, although officials say 8 million bpd capacity is more realistic. Increased crude production is expected to bring huge increases in associated gas output and Iraq may soon produce more gas than it can use, opening up the possibility of gas exports.

For Iraq, the deal is a key part of its strategy to alleviate power generation woes. Despite billions of dollars spent since the 1990s to rebuild Iraq’s dilapidated electrical grid, Iraqis still suffer through chronic power outages that have led to sometimes violent protests. The project may include the construction of an LNG export facility with a maximum capacity of 600 million cubic feet per day. Exports are possible once Iraq's domestic needs are met. The project needs investment of $17.2 billion, officials said, including $12.8 billion to rehabilitate existing facilities and build new ones, and $4.4 billion for the LNG export unit. The Shell-Mitsubishi partnership expects an internal rate of return on the project of 15 per cent on an initial investment of $6.98 billion, while SGC plans to put in $3.7 billion of public funds initially and fund the rest through gas sales.

# # #

Corolla Financial specializes in providing a range of financial advisory and brokerage services to personal and corporate clients. Regardless of what stage of life or business you are at, Corolla delivers comprehensive advice and services custom designed to address your needs. http://www.corollafinancial.com

--- End ---

Click to Share

Contact Email:
***@corollafinancial.com Email Verified
Source:Corolla Financial
Country:Spain
Industry:Industrial, Energy, Business
Tags:iraq, Gas, royal dutch shell, mitsubishi, Energy, opec, oil
Shortcut:prlog.org/11737043
Disclaimer:   Issuers of the press releases are solely responsible for the content of their press releases. PRLog can't be held liable for the content posted by others.   Report Abuse

Latest Press Releases By “

More...

Trending News...



  1. SiteMap
  2. Privacy Policy
  3. Terms of Service
  4. Copyright Notice
  5. About
  6. Advertise
Like PRLog?
9K2K1K
Click to Share