UPDATE 2-Iraq unveils oilfields open for long-term contracts
ju4 wa4i dia4n zo1ng he2 ba4o da4o :\n  (Adds details)\nBy Ahmed Rasheed\nBAGHDAD, June 30 (Reuters) - Iraq on Monday opened its giant\noilfields to foreign firms, clearing the way for major\ninvestment by multinationals ushered out nearly 40 years ago\nunder nationalisation.\nThe move is a breakthrough for the return of the oil majors,\nwhose cash and technical knowhow Iraq needs to restore its\nantiquated oil infrastructure that has been hard hit by years of\nsanctions and war.\nThe fields are Rumaila, Kirkuk, Zubair, West Qurna Phase 1,\nBai Hassan and the Maysan fields. Maysan comprises three fields,\nBazargan, Abu Gharab and Fakka, and the Oil Ministry said they\nare open to foreign firms for long-term development contracts.\nIt said last week it hopes to sign six short-term oil\nservice contracts during the next month.\nFor a factbox please click on [ID:nL304967]\nTaken together, the short-term and long-term contracts will\nopen the door to major international involvement in the OPEC\nmember's oil sector for the first time in nearly four decades.\nThe majors have been positioning for years in the hope of\neventually gaining access to Iraq's proven reserves, which at\n115 billion barrels are the world's largest after Saudi Arabia\nand Iran.\nDeputy Prime Minister Barham Salih said in April that\nreserves could be as much as 350 billion barrels.\nOil Minister Hussain al-Shahristani announced the list at a\nnews conference in Baghdad. The government has already\npre-qualified 41 foreign firms to bid for the contracts.\nTwo gas fields, Akkas and Mansuriyah, were also opened.\nThe Oil Ministry said last week it had finished negotiations\nwith oil majors on six separate short-term oil service contracts\nand hoped to sign those deals during the next month.\nThe short-term deals, each worth about $500 million, are\naimed at quickly lifting output at Iraq's largest producing\nfields by a combined 500,000 barrels a day. Iraq's current oil\nproduction is around 2.5 million bpd.\nFive of the short-term deals that have been under discussion\nare with Royal Dutch Shell <RDSa.L>, Shell in partnership with\nBHP Billiton <BHP.AX>, BP <BP.L>, Exxon Mobil <XOM.N> and\nChevron <CVX.N> in partnership with Total <TOTF.PA>.\nIraq has also been in talks with a consortium of Anadarko\n<APC.N>, Vitol and Dome for a sixth short-term contract.\nThose talks on the short-term deals have given the majors a\nhead start in efforts to bid for future oil contracts.\nIndeed, in terms of the short-terms contracts, Shell\nnegotiated for the northern Kirkuk oilfield and was also in\ntalks on the Maysan fields, Iraqi officials have said. BP has\nits eyes on the southern Rumaila field, while Exxon wants the\ncontract for the Zubair oilfield in southern Basra province.\nAnd Chevron and Total were looking to work together to\ndevelop West Qurna, also in Basra.\nDEEP HISTORY, RESENTMENT\nBut many Iraqis still bear a grudge after British, American\nand French oil companies controlled their oil industry for half\na century through the Iraq Petroleum Co (IPC).\nIt was an era when Western majors working in the Middle East\nused oil output and prices as an economic and political tool,\nanalysts said.\nFrom the time it struck oil at the huge Kirkuk field in 1927\nuntil nationalism forced it out in 1972, IPC -- made up of BP,\nExxon, Mobil, Shell, CFP (Total) and Partex - ruled the roost.\nThat did not sit well with Baghdad, which resented IPC's\ncontrol over its revenues.\nAfter bids are submitted for the long-term contracts,\nnegotiations may take months. At the end of 2008 or in early\n2009, the oil ministry has said it would announce the winners.\nOil is Iraq's main source of income, and boosting output is\nkey to earning the cash the country needs for reconstruction.\nIraq's cabinet agreed a draft oil law in February last year,\nbut it has failed to get through parliament partly because of\nrows between the Kurdistan Regional Government (KRG) and Baghdad\nover who will control oil reserves and contracts.\nIn the absence of the law, Baghdad has moved ahead with the\nshort and long-term contracts, saying this is in line with an\nold oil law in existence before the U.S.-led invasion in 2003 that toppled Saddam Hussein.\n(Writing by Dean Yates and Tim Cocks; Editing by James Jukwey)\n((tim.cocks@thomsonreuters.com; Reuters Messaging:\ntim.cocks.reuters.com@reuters.net))\nREUTER DY\nKeywords: IRAQ/OIL