Iraq’s Oil Ministry has agreed to slash signature bonuses on two oilfield development deals secured by oil companies but is turning them into unrecoverable payments rather than soft loans, an official said on Wednesday.
The signature bonus for the 8.7-billion-barrel West Qurna Phase One oilfield to be paid by Exxon Mobil and Royal Dutch Shell will be cut to $100 million from $400 million, said Sabah Abdul Kadhim, head of the legal section of the ministry’s petroleum contracts and licensing directorate.
The bonus for the 4-billion-barrel Zubair oilfield won by Italy’s Eni (ENI.MI) and its partners Occidental Petroleum Corp and South Korea’s KOGAS will be $100 million also, compared to $300 million previously, he said.
The deals are among a series signed this year and last year that have the potential to catapult Iraq into third place from 11th among global oil producers, with its capacity possibly rivalling top producer Saudi Arabia’s.
Potential capacity of 12 million barrels per day compared with 2.5 million bpd now would give Iraq the billions of dollars it needs to rebuild after years of war and economic decline.