Shell agrees landmark $4 bln gas deal with Iraq
6 hours ago
BAGHDAD (AFP) — Anglo-Dutch energy giant Royal Dutch Shell has agreed to a gas joint venture with Iraq worth up to four billion dollars, the Iraqi oil ministry said Tuesday, becoming the first Western oil major to gain access to the violence-wracked country's vast energy reserves.
The deal to capture unwanted gas burned off during oil production for sale both inside Iraq and abroad is expected to be signed in Baghdad next month, ministry spokesman Assem Jihad told AFP.
It would make Shell the first Western oil group to return to Baghdad since the US-led invasion of 2003 and the Financial Times said it is estimated to be worth about between three billion and four billion dollars.
Iraq's cabinet approved the contract, giving the state-owned Southern Oil Company 51 percent and Shell 49 percent in the venture based in the main southern city of Basra.
The project is intended to make use of the 21 million cubic metres (700 million cubic feet) of gas -- roughly enough to meet the demand for all of Iraq's power generation -- that the oil industry burns off for safety reasons, the FT said.