The Iraqi cabinet has delayed finalising a multibillion-dollar deal with Anglo-Dutch giant Royal Dutch Shell and Japan’s Mitsubishi to capture gas from Basra’s oilfields because of legal issues related to the joint venture, AKnews reports.
The cabinet already approved the planned $12 billion investment in June, but it is now waiting to sign the final draft once it is resubmitted by the Oil Ministry.
The government holds a 51% stake in the project.
Reuters reports that the deal could be delayed further if the Oil Ministry fails to return the draft before a new government is formed.
Thamir al-Ghadhban, a top adviser to incumbent Prime Minister Nuri al-Maliki, told reporters at the Iraq Future Energy 2010 conference in Istanbul that “it really is left to the Oil Ministry to finalise this; they are now improving the draft”.
Iraq flares an estimated 1 billion cubic feet of gas every day at its oilfields.
The deal with Shell was first agreed in 2008. The Oil Ministry and Shell are now discussing changes in the final draft to address a technicality preventing the ministry from a role in forming the joint venture, Ghadhban said.
Some government members would have preferred the contract to have been awarded in a competitive process, he added.
(Sources: AKnews, Reuters)