The oil ministry has also hired two consulting firms, one from the U.S. and another from the U.K., to look at the legal and economic aspects of the draft gas deal with the Shell-led venture. "These firms have also found that some of the provisions of the deal aren't favorable for Iraq and proposed changes," Shamma said. He didn't name the two firms.
The deputy oil minister said that he, the deputy prime minister for energy affairs, Hussein al-Shahristani, and newly appointed oil minister Abdul Kareem Luaibi [Elaibi] would attend a meeting in the ministry later this week to discuss how to resolve legal and economic hurdles. He expects that resolving these issues would take some time.
Shahristani, who is a former oil minister, had previously said that the deal could be signed by the end of last year.
The Iraqi cabinet already had approved the planned investment last June, but it is now waiting to sign the final draft once it is resubmitted by the oil ministry.
The joint venture initially would deliver gas to Iraq's domestic market, mainly for electricity generation, but would export extra gas after meeting local needs in the form of liquefied natural gas, or LNG.
The joint venture had seen opposition from Iraqi lawmakers and politicians who argued that the deal was not transparent and that the oil ministry didn't allow other international companies to compete for the project. The oil ministry, however, then said that three companies were invited and Shell won the deal.
Iraq, which has natural gas reserves totaling 112.6 trillion cubic feet, produces only around 1.6 billion cubic feet a day, half of which is being flared. However, the country has ambitions to become one of the world's biggest LNG exporters.
(Source: Dow Jones)
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