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China to resume development of Iraqi oil field

(Xinhua)
Updated: 2006-10-31 14:36

China National Petroleum Corporation (CNPC), China's largest oil producer, is preparing to resume exploration of the Ahdab oil field in Iraq.

According to the Shanghai Securities News, representatives from both the Chinese and Iraqi governments will begin discussions on the development of the oil field next month.

The Ahdab oil field has an estimated reserve of one billion barrels. The CNPC first signed up to explore it in 1997, during Saddam Hussein's regime.

During his visit to China last week, Iraqi Oil Minister Hussein Shahristani said Iraq welcomed Chinese oil companies to participate in the reconstruction of the Iraqi oil industry.

However, Shahristani said all deals reached under former President Saddam Hussein must be renegotiated within the framework of the new oil and gas laws that are currently being discussed in Iraq. According to the minister, the law is expected to be passed before the end of this year.

"The ongoing process is exciting," said an insider with the CNPC. "The CNPC is confident of regaining the development rights of the Ahdab oil field despite needing to renegotiate the contract terms."

"It will be commercially efficient for the CNPC as the oil field is near to oil pipelines and oil refineries," he added. The estimated exploitation fee is 700 million U.S. dollars.

According to Hussein Shahristani, the country's daily oil production has reached 2.5 million barrels, returning to the same level prior to the collapse of Saddam's regime in 2003. Its targets are 4.5 million barrels in 2010 and 6 million barrels from2012 to 2030.

"We intend to invite bids from foreign companies for the first batch of oil fields soon in order to reach our targets," he said.

During his visit, Shahristani also met representatives from other major Chinese oil companies including China Petrochemical Corporation, China National Offshore Oil Corporation and Sinochem Corporation.

China is willing to resume and promote oil cooperation with Iraq, said Chinese Foreign Ministry spokesman Qin Gang last month.

Qin said current Sino-Iraqi cooperation only involved oil trade and personnel training due to the U.S.-led war in Iraq which broke out in March 2003.




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