A consortium comprising of ExxonMobil and Royal Dutch Shell beat rival consortiums from Russia, France and China to secure initial rights to develop Iraq's giant West Qurna phase 1 oilfield, one of the largest in the country.
The Iraqi oil ministry said yesterday that ExxonMobil and Shell have signed a 20-year agreement with Iraq to spend £50 billion on developing the country's second-biggest oilfield, believed to hold approximately 8.5-billion barrels of untapped oil.
The joint venture, where ExxonMobil will be holding an 80-per cent stake and Shell 20 per cent, have proposed to boost production to 2.325 million barrels per day from the current less than 500,000 bpd.
Under the service contract, Exxon Mobil group would not share the oil production, but only be paid fees of $1.9 per extra barrel produced, Iraqi Oil Minister Hussein al-Shahristani told a press conference yesterday.
A consortium led by Russia's Lukoil, which had ConocoPhillips in it and two other consortiums led by France's Total and China's CNPC lost out although the same oilfield was given to Lukoil to develop under Saddam Hussein's regime.
During the June bidding, both Exxon and Lukoil had cast their eyes on the massive West Qurna oil field, where Exxon had initially proposed a payment of $4-a-barrel for new production, while Lukoil had offered $6.49 a barrel.