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Shell Sets Up First Iraq Office Since the 1970’s

Shell Sets Up First Iraq Office Since the 1970’s

Published: September 22, 2008

BAGHDAD — Royal Dutch Shell, one of the world’s biggest oil companies, completed a multibillion-dollar natural gas deal with theIraq government on Monday and quietly mentioned that it had established an office in Baghdad — the first foreign petroleum giant to do so since this country’s oil industry was nationalized three decades ago.

The company described the events here as a milestone that partly reflected the vast improvement in Iraq’s stability compared with the worst years of the war. But in a sobering reminder of the underlying dangers to doing business here, the company would not disclose the location of its Baghdad office, and the senior Shell official who announced the gas deal was accompanied by a phalanx of armed guards.

“We are ready to establish a presence,” the official, Linda Cook, executive director of the company’s gas and power unit and a member of the board, said during a news conference in Baghdad’s heavily guarded Green Zone in response to a question

Ms. Cook, who oversaw the signing of the gas deal with the Iraqi government, appeared with Iraq’s oil minister, Hussain al-Shahristani.

The joint venture — to recapture gas that now goes to waste during oil extraction in Basra, in southern Iraq — is the company’s official return to Iraq after 36 years. Along with BP, Exxon Mobil and Total, Shell was among the original partners in the Iraq Petroleum Company before losing their oil concessions to nationalization as Saddam Hussein was rising to power in the 1970’s.

Much of the recaptured gas will go to power stations and industrial sites like petrochemical and fertilizer plants, Mr. Shahristani said. Shell is one of more than 30 foreign companies bidding on long-term contracts for six important oil fields. The winners will be announced in 2009. A condition for any winning bid set by the Iraqi government is the willingness to establish and staff a company’s presence in Baghdad.

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