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Cost hike on Shell Iraq deal

Cost hike on Shell Iraq deal

Iraq’s gas deal with supermajor Shell, to capture and exploit associated gas from its giant southern oilfields, is expected to produce 2 billion cubic feet per day and cost $17.2 billion, according to an official agreement summary.

Aleya Begum 16 August 2011 09:38 GMT

The figures were reported by Dow Jones, who obtained a copy of the summary agreement.

The Iraqi Oil Ministry signed a final draft deal with Shell and Japan’s Mitsubishi last month, to develop gas production in a number of giant oilfields in the Basra region of southern Iraq.

Investment in the 25 year joint venture was initially announced as $12 billion.

The deal will harness associated gas from the Rumaila, West Qurna 1 and Zubair fields being developed by BP, ExxonMobil and Eni, respectively.

The controversial agreement, which has faced fierce opposition due to the Oil Ministry selecting Shell on a non-competitive basis, still needs to go to Cabinet for final approval.

Published: 16 August 2011 09:38 GMT  | Last updated: 16 August 2011 09:53 GMT

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