ENI Stays in Last Minute Deal, Sonangol Exits

By John Lee.

Tense negotiations between Baghdad and Italy's ENI came to a close just hours before ENI was supposedly going to call time on their Iraq operations, Reuters reports.

ENI CEO Paulo Scaroni made his dissatisfaction clear to reporters on Tuesday before the new deal was struck, stating,

"If they do not sign the contracts in a couple of weeks we will go. We have waited six months. I am hopeful, we have no reason to believe they won't do it."

In the North, Angola's Sonangol ended its operations citing security concerns. An Iraqi government official blamed persistent al-Qaeda activity in the area.

But the decision of ENI's CEO to stay in Iraq is a victory of sorts for the Iraqi government following a series of reports about the damaging effect of bureaucracy and unattractive  contractual terms offered by the government.

ENI has now gained approval to raise production at the Zubair field from 320,000 bpd to 850,000 bpd. An Iraqi government spokesperson said of the recent deal,

"We respect Eni and take their opinions seriously. We want them to stay in Iraq.We're doing our best to approve high-cost contracts as quickly as we can. If they are delayed, it affects productivity and profitability."

(Source: Reuters)



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