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Shell happy with progress of Iraq natgas talks-CEO

Reuters

WASHINGTON, Oct 8 (Reuters) – The chief executive of energy company Royal Dutch Shell (RDSa.L) said he is pleased with the progress of negotiations with Iraq on developing natural gas currently flared at the southern oil hub of Basra.

Last month Iraq’s Deputy Oil Minister Ahmed al-Shamma, stressing he spoke for himself rather than the Iraqi Oil Ministry, said he expected the project would not be signed until after the Jan. 16 elections in which the OPEC nation will select a new parliament.

“We are currently negotiating a final agreement for gas in South Iraq,” Peter Voser, the CEO of Shell, told a meeting at the Woodrow Wilson International Center for Scholars on Thursday

“We are pleased with the progress so far and we hope to finalize that in due course.”

The Iraqi government has been working to finalize the joint venture between its South Gas Company and Shell and Mitsubishi (8058.T). The deal would capture huge amounts of gas for domestic use or export, which is currently wasted by being flared at the oil fields.

The venture, once in place, would be at the forefront of Iraq’s plans to modernize its energy facilities and boost oil exports that hover around levels they were before the U.S.-led invasion in 2003.

Still, the plan faces opposition from lawmakers who criticize its terms and say it would be unconstitutional unless it was sent to them for approval.

On oil deals, Voser said Shell is in “constant contact and discussions with the Iraqi government” on the second round of bidding for contracts to develop Iraq’s vast oil fields. Shell has not yet bid on the second round.

Shell and more than 40 other of the world’s major energy companies have qualified for the second round, which is expected to culminate in December.

The company withdrew from the first round because it did not like the conditions offered by the Iraqi government. “We do hope the second round will be more successful for both sides, the Iraqi government and people, and international oil companies,” Voser said.

(Reporting by Timothy Gardner; Editing by Lisa Shumaker)

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