Friday, November 03, 2006
China, Japan to renegotiate oil deals with Iraq
Oil, Commerce
China and Japan have staked their claim to develop Iraq's vast oil reserves with Tokyo offering billions of dollars in loans and Beijing agreeing to renegotiate a deal signed with Saddam, Iraq's oil minister said Wednesday. Hussain al-Shahristani was briefing reporters after a tour of Asia that took in the world's second biggest oil consumer China and its third biggest Japan -- both heavily dependent on imports and keen to secure future energy supplies. The Baghdad government is working towards its first foreign oilfield development contract and is readying a legal framework.
"The Japanese said they were willing to provide soft loans with maturity of up to 40 years for any amount of money we need to develop the oil industry -- to develop the refineries, exports and production," Shahristani said."Right now there is a Japanese loan of $3.5 billion. More than one billion will be spent to develop the Basra refinery. Also on building a floating port and an export pipeline." Shahristani said Japanese firms were interested in oilfields in southern Nassiriya.
He said Iraq and China had formed a committee to look again at China's contract, signed with Saddam Hussein, to develop the 90,000 barrels per day Ahdab oilfield in south central Iraq.The committee, made up of three or four people from each side, will review the articles of the contract to "serve Iraq's interests", Shahristani said. It will meet in November. Ahdab, with an estimated development cost of $700 million, was awarded to China National Petroleum Corp and Chinese state arms manufacturer Norinco by Saddam. The deal was frozen by international sanctions and then Saddam's overthrow. Shahristani said all oil contracts signed under Saddam would be reviewed by a national committee because the ministry wanted to make sure contracts were to Iraq's benefit.
