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Shell,CNPC Ink MoU,Agree On Shareholdings For Iraq Bid-Source

THE WALL STREET JOURNAL

MAY 14, 2009, 3:39 A.M. ET

BEIJING (Dow Jones)–Royal Dutch Shell PLC (RDSB) has agreed on a shareholding structure with China National Petroleum Corp. ahead of a joint bid for a contract to develop an oil field in Iraq, a person familiar with the talks said.

Shell signed a memorandum of understanding with China National Petroleum Corp. last month, and is now discussing details of the official joint bid agreement to develop the Kirkuk oil field, the person said.

China Petrochemical Corp., known as Sinopec Group, will also join the consortium, the person said.

“Shell, CNPC and Sinopec will together have a 75% stake if the bid is successful. CNPC will have 15%, Sinopec is likely to have a similar interest,” the person said on condition of anonymity.

The remaining 25% interest will be held by a state-owned Iraqi operator, according to Iraq’s model contract for the eight oil and gas fields offered to international oil companies in the first bidding round. The winners will be decided in Baghdad on June 29-30.

Last month, Jeroen van der Veer, Shell’s chief executive, confirmed that the Anglo-Dutch oil major was in talks with Chinese firms to be a part of the consortium bidding for an Iraqi oil field.

Shell spokesperson Li Lusha declined to comment beyond van der Veer’s comments in April. Spokespersons for CNPC and Sinopec weren’t immediately available for comment.

Wan Xu contributed to this story, Dow Jones Newswires; 8610-65885848; [email protected]

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