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Shell, China Oil Cos May Make Joint Iraq Oilfield Bid -Source


Monday, April 13, 2009 As of 9:34 AM (GMT +1 hours)

SHANGHAI (Dow Jones)–Royal Dutch Shell PLC (RDSB.LN) is in advanced talks with China’s two biggest state-owned oil companies on a possible joint bid to develop the Kirkuk oil field in northern Iraq, a person familiar with the situation said.

Shell, China National Petroleum Corp., parent of Hong Kong-listed PetroChina Co. (PTR) and China Petrochemical Corp., parent of China Petroleum & Chemical Corp. (SNP) are yet to decide equity stakes in the consortium, the person said.

Shell had offered CNPC a 15% stake, but CNPC wanted more, at around 20%, he added. Stakes that Sinopec Group had been offered are unclear.

In return for taking CNPC along in Iraq’s landmark first postwar bidding for development service contracts in its huge and under-developed oil and gas fields, Shell hopes to win CNPC’s blessing for a production sharing contract for the Jinqiu gas field in China’s southwestern Sichuan province, the person also said.

The joint bid, if finalized, would mark China’s latest efforts to tap Iraq’s rich energy resources, after CNPC became the first foreign oil firm to enter an investment deal with the new Iraqi government in its domestic oil industry since the 2003 U.S.-led invasion.

“We do not comment on market speculations,” said Li Lusha, Shell China’s spokeswoman, when asked about the talks.

CNPC’s spokesman and Sinopec Group’s general office weren’t immediately available for comment.

-Jing Yang contributed to this story, Dow Jones Newswires; (8621) 6120 1200; [email protected]

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