Occidental, Pertamina Consider Sonangol's Iraq Deals

US oil major Occidental Petroleum Corp and Indonesian state oil firm Pertamina have shown an interest in taking a stake in Sonangol's two Iraqi oilfield development projects, a company official said on Sunday.

"Our proposal will be for Sonangol to have 45 per cent in Najmah and Qayara [Qaiyarah]," Sonangol executive J. da Graca Luis told Reuters in Baghdad, on the sidelines of a meeting between oil companies and the Oil Ministry.

"The rest will be for Occidental or Pertamina or whoever," Luis said. Sonangol currently has a 75 per cent stake in the oilfield projects, with the state oil company holding 25 per cent.

Dow Jones reports that the companies will meet in August to discuss co-operation.

According to the plan, Sonangol would boost production from the two fields to 50,000 barrels a day in 2013, of which 20,000 barrels a day will come from Najmah and 30,000 barrels a day from Qaiyarah oil fields. Four to five rigs are needed to drill these wells, according to the Dow Jones report.

The two fields, each holding some 800 million barrels of proven oil reserves, are located near the volatile city of Mosul, 400 kilometers north of Baghdad.

The company will drill up to 40 wells in both fields next year, but this depends on the availability of rigs, Luis said. It will also start building camps this year, he added.

Two oil licensing auctions last year awarded 11 deals to international oil companies that promise to add nearly 10 million barrels a day of capacity to Iraq's existing 2.5 million barrels a day by 2017.

Sonangol was awarded the two fields last year. According to the 20-year contracts, the firm needs to boost production from the Qaiyarah and Najmah oil fields to 120,000 barrels a day and 110,000 barrels a day at a fee of $5 and $6 a barrel, respectively.

(Sources: Reuters, Dow Jones)

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