An Iraqi government spokesman said on Tuesday that the water injection project to help boost production from Iraq's southern oilfields is expected to exceed $10 billion.
Reuters reports that Iraq's cabinet approved a plan on Tuesday to repay the cost of the scheme to the international oil companies that would need to initially fund the project.
Quoting government spokesman Ali al-Dabbagh, the report says Iraq still needs to negotiate how to make the repayment, which will be taken from the country's future oil revenues.
"This we need to negotiate with them. It depends on how to make the repayment structure, because it is huge amount. It will affect the revenue of Iraq," said Dabbagh after the weekly cabinet meeting.
U.S. oil major ExxonMobil had said it was taking the lead among oil companies that won development contracts for southern oilfields in two auctions last year, in coordinating initial studies for the project.
The cost of the project would be distributed among those majors, an Iraqi oil official said in April.
The water injection scheme could help raise extraction rates at Iraq's southern oilfields such as West Qurna, Majnoon, Zubair, and Rumaila. The fields are being developed by oil majors such as BP, Royal Dutch Shell , Lukoil , China's CNPC and Eni of Italy .
Water injection helps to increase the amount of crude that can be pumped from oilfields and will be a key to enabling the oil firms to reach ambitious production targets set in the oilfield development contracts.
The project aims to produce 10-15 million bpd of water and would use seawater, an Exxon executive told Reuters in July.
(Sources: Reuters, Platts)