Iraq seals $3.5-billion oil deal with Gazprom group

Striving to become a major oil producer in the world after years of external aggression and political uncertainties, Iraq yesterday sealed yet another deal with a group led by Russia's oil and gas behemoth Gazprom to develop its Badrah oilfield, located in the eastern part of the country.

The consortium includes Gazprom Neft, the oil arm of Gazprom with 30 per cent stake, South Korea's Kogas with 22.5 per cent, Malaysia's Petronas holding 15 per cent and Turkey's national oil company TPAO with 7.5 per cent in the venture.  Iraq's Oil Exploration Company will hold the remaining 25 per cent stake.

The group will develop the Badrah oilfield situated in Wasit governorate, 160km southeast of Baghdad, and extending across the border with Iran. The field has an estimated 150 million barrels of reserves.

The targeted production of 170,000 barrels per day (bpd) of oil will be achieved in 6 to 7 years. As per the terms of the deal, the consortium will be paid of $5.50 per barrel of oil production.

The consortium plans to develop the field by investing approximately $3.52 billion over a period of 20 years. Kogas indicated that the company will invest around $1.05 billion in the project.

A senior official from TPAO Metin Korucu said after the signing of the deal: ''Very soon we'll have a meeting with our partners, hopefully in February, and then we will start implementing the project."