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Reuters: UPDATE 1-Shell, Dow in talks on $2.1 bln Iraq chemical plant

Wed Aug 29, 2007 12:22 PM BST

DUBAI, Aug 29 (Reuters) – Royal Dutch Shell Plc (RDSa.L: Quote, Profile , Research) and Dow Chemical (DOW.N: Quote, Profile , Research) are in talks with the Iraqi government to rehabilitate and expand a chemical plant in southern Iraq at a cost of up to $2.1 billion, the Iraq industry minister said.

The talks on creating a joint venture or reaching a profit- sharing agreement could be concluded this year, Fawzi Hariri told Reuters in Dubai on Wednesday on the sidelines of an Iraq reconstruction conference.

“We are looking to upgrade this, and evaluate what type of products and facilities we need for the local market and beyond,” Hariri said of the plant near the city of Basra.

Alexandra Wright, a spokeswoman for Shell in London, declined to comment and a spokesman for Dow could not immediately be reached for comment.

Iraq, the world’s third-largest holder of oil reserves, produces most of its crude in the south of the country. (Additional reporting by Tom Bergin and Miyoung Kim in London)

© Reuters 2007. All Rights Reserved.

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