Iraq sees opportunities for Japanese oil firms

Iraq's oil minister, Hussain al-Shahristani, said his country welcomes the broad participation of Japanese firms in oil development projects.

March 16, 2009

2 min read

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Mar. 16 -- Iraq's oil minister, Hussain al-Shahristani, said his country welcomes the broad participation of Japanese firms in oil development projects.

"Our doors are wide open for cooperating with Japanese firms," said the Iraqi oil minister. He said the Iraqi people are "very grateful" for Japan's cooperation in helping to "rebuild the country and improve safety following the end of the dictatorship."

Nippon Oil Corp., Inpex Corp., and JGC Corp. have submitted a joint bid for developing Nasiriyah oil field in southern Iraq, targeting an output of 300,000 b/d.

Two European consortiums, led by Italian energy firm Eni SPA and Spain's Repsol, also have put forward proposals to work the field, whose total cost of development is estimated at ¥500 billion-1 trillion ($5-10 million).

In addition, Al-Shahristani said a refinery to produce gasoline and diesel will be built to process Nasiriyah production.

The minister said the technical aspects of the plans are under review, and the selection will be made after bidders submit cost figures by the end of March.

The Japanese government is offering financial backing through the Japan Bank for International Cooperation to support the bid. Al-Shahristani indicated that his country's decision could come as early as April.

Another project
Meanwhile, the Japanese are awaiting the outcome of another decision concerning their participation in Iraq's oil and gas industry.

In February, reports said the Iraqi government had agreed that Mitsubishi Corp. could partner with Royal Dutch Shell PLC in a joint venture to build the pipe and plant facilities needed to exploit associated natural gas from Basra-area oil fields in southern Iraq (OGJ Online, Feb. 12, 2009).

Shell and the Iraqi oil ministry agreed last fall to form a joint venture to extract the gas, with a ministry-affiliated firm taking a 51% stake and the Anglo-Dutch company obtaining the rest.

Mitsubishi Corp. is currently negotiating with Shell to buy a stake of about 15% in the project, and the Japanese firm hopes to complete the agreement by midyear.

Contact Eric Watkins at [email protected].