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Iraq gas deal with Shell to include Mitsubishi

Reuters

BAGHDAD, Feb 12 (Reuters) – Iraq is moving closer towards finalising a multibillion dollar natural gas deal with a joint venture including Iraq’s South Gas Company, Royal Dutch Shell (RDSa.L) and, now, Mitsubishi (8058.T), an official in the country’s oil ministry said.

Oil Minister Hussain al-Shahristani met in Baghdad on Wednesday with a senior regional official from Shell, along with officials from Mitsubishi and the state-run gas company, said Asim Jihad, a ministry spokesman.

Last September, Iraq signed an initial agreement on the deal, described then as a joint venture between Shell and the South Gas Company, in the southern Basra province.

Under the terms of the deal announced then, Iraq would hold 51 percent of the venture and Shell 49 percent. The deal will now include Mitsubishi, Jihad said.

The deal, which includes the capture of natural gas released as a by-product of crude oil extraction, overhaul of gas facilities in Basra and the production of dry gas, is another project that Iraq hopes will repair years of isolation and underinvestment under Saddam Hussein and boost energy output.

Shahristani urged drafting a final deal as quickly as possible. Another meeting will follow in two weeks, Jihad said.

Iraq, with the world’s third largest oil reserves, is also in the process of making major oil contracts available to the world’s biggest oil firms.

Iraq’s proven natural gas reserves are 112 trillion cubic feet, a 2007 report from the U.S. government’s energy statistics unit said.

The deal has also attracted criticism from the Iraqi parliament, where some lawmakers complain that it lacked transparency and would hand a foreign company a monopoly on valuable gas fields.

(Reporting by Ahmed Rasheed; Editing by Marguerita Choy)

 

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