Iraq: oil deal with Japan failed

Nippon Oil Corp believes talks over Nasiriyah oil development deal are still going despite Shahristani’s comments.

TOKYO - Iraqi Oil Minister Hussein al-Shahristani has said that talks over a huge oil development deal with a Japanese energy consortium had broken down, a leading Japanese newspaper reported Tuesday.

Baghdad would "promote the development (in the Nasiriyah oil field) centered around an Iraqi state-owned company", he was quoted as saying by the Asahi Shimbun.

The field is expected to produce 600,000 barrels a day, which would equal 10 percent of Japan's crude consumption.

But a spokesman for Nippon Oil Corp, one of three Japanese energy firms in the consortium, said "the company believes the negotiations are still going. We don't understand what the minister really meant by his remarks".

Nippon Oil said in August the talks were "in progress toward an agreement" that would have set a new production volume record for Japanese companies.

Japan, the world's second-largest economy, has few natural resources and is almost entirely dependent on the Middle East for its oil.

Iraq held an oil field auction in December which increased its projected production to 12 million barrels per day within seven years.

During the auction, Baghdad awarded a deal to Malaysia's Petronas and Japan's Japex to develop the Garraf oil field, also in southern Iraq, which has known reserves of 863 million barrels of oil.

The Asahi said the Iraqi government of Prime Minister Nuri al-Maliki, who faces elections Sunday, has been criticized for granting too many concessions to foreign oil companies and was reluctant to give more deals to foreigners.

Source: Middle East Online.
Link: http://www.middle-east-online.com/english/?id=37574.