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Iraq oil talks break down

Iraq oil talks break down

By Lucy Barnard

Last Updated: 11:07pm BST 17/08/2008

Six short-term deals between the Iraqi government and international oil companies are likely to be abandoned after the US embassy said talks had broken down yesterday.

Short-term technical support contracts between the Iraqi government and the multinational companies, each worth around $500m (£268), were due to have been signed earlier this year but stalled due to disagreements over terms, a senior diplomat said.

Charles Ries, co-ordinator for Iraq’s economic transition at the US embassy in Baghdad, admitted that talks between the Iraqi government and a consortium led by US-based Anadarko had already fallen through.

Others with Royal Dutch Shell, a joint venture between Shell and BHP Billiton, BP, Exxon Mobil and a venture between Chevron and Total now seem unlikely to go ahead.

“It appears that on present form (the Iraqi government) probably won’t proceed with most of these or all of them,” Mr Ries said. “But I think some of the companies are open to continued discussions even on relationship grounds, and some of the companies don’t think it’s worth their time.”

He added that the short-term contracts had limited appeal for the oil companies but some had hoped to go on to win longer-term development contracts, which would be far more lucrative.

The deals would have given global oil companies their first major involvement in Iraq’s oil sector in nearly 40 years.

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