China’s Cnooc and Turkish Petroleum Corp bag oil field deal in Iraq
18 May 2010
China's largest offshore oil producer Cnooc's wholly owned subsidiary Cnooc International Limited yesterday signed a technical service contract with Turkish Petroleum Corporation (TPAO), for the development and production of the Missan Oil Fields in southern Iraq, about 350 kilometers southeast of Baghdad.
The 20-year contract is aimed at raising the daily output of the Missan oil fields to 450,000 barrels per day (bpd), from the current production of 100,000 barrels per day, over the next six years, Cnooc said in a statement.
Cnooc will earn $2.3 per barrel on the incremental oil production once the daily output has been raised by 10 per cent from its current level and will recover its expenditure through a cost recovery mechanism, it said.
The Chinese company will act as the operator and hold a 63.75-per cent stake in the project, while the Turkish state-owned company will hold an 11.25-per cent stake and the Iraqi Drilling Co, a local Iraqi company, will hold the remaining 25-per cent stake in the project.
The deal is still subject to approval from the Iraqi government and a few pre-conditions.
This deal makes China more rapidly becoming the leading foreign player in Iraq's recovering oil sector with China's continuous focus to search for energy resources to take care of its country future.
''It is a great pleasure to participate in rebuilding Iraqi's oil industry together with TPAO. CNOOC Ltd and its partner will carry out an active investment plan on the development of the Missan Oil Fields, to increase the production level for the benefits of all parties.'' said Fu Chengyu, chairman and CEO of Cnooc Ltd.
