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UK’s Mesopotamia and Iraq 
to Ink JV for Drilling Deal

BAGHDAD - Iraq’s Oil Ministry and British firm Mesopotamia Petroleum Company will sign a joint venture deal on Thursday to drill 60 new oil wells a year, starting with oilfields around the southern city of Basra, an official said.

The joint venture, which will have a start-up capital of $90 million, is expected to raise Iraq’s oil production by 120,000 barrels per day within a year, said Idrees al-Yassiri, head of the state-owned Iraq Drilling Company.

The first wells will be drilled in fields around Basra, Iraq’s main oil hub but the joint venture will operate throughout the country, Yassiri told Reuters.

The joint venture will start immediately after we sign because we have a business plan to get on with,ª Yassiri said while waiting for Oil Minister Hussain al-Shahristani and MPC’s chairman, Stephen Remp, to sign the venture.

Remp is also chairman of Ramco Energy PLC, which has a 32.66 per cent interest in MPC.

Asked why the British firm was chosen Yassiri said: “They were the most persistent. And they were most courageous, willing to come to Iraq while other companies are still hesitating. They most deserved to be given the job.ª

Faced with plunging oil revenues after crude prices tumbled from their record highs of $147 per barrel last year, Iraq is searching for short-term measures to boost oil production.

The country sits on the world’s third largest proven oil reserves and desperately needs funds to rebuild after six years of conflict triggered by the US-led invasion of 2003.

Current national production is around 2.3-2.4 million barrels per day and crude exports, 80 per cent of which go through the oil ports in Basra province in the south, have hovered around 1.8-1.9 million bpd.

The exports are down from a post-invasion high last year of 2 million bpd because of technical problems.

While pressure issues have also hampered the flow of oil from southern fields, overall output is below pre-invasion levels because of sabotage and the dilapidated infrastructure after years of war, international sanctions and underinvestment.

Iraq is opening up its underexploited oil and gas fields to international firms this year through two bidding rounds for service contracts.

Enthusiasm has been tempered by concerns about security, despite a recent sharp fall in violence across Iraq, and the failure of Prime Minister Nuri al-Maliki’s government to pass a new national oil law.

The oil law is expected to clarify the distribution of control over oil resources between the central government and the provinces. Oil firms hope it will allow them to sign production sharing agreements, which they prefer, rather than simple 
service contracts.”