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Cost hike on Shell Iraq deal

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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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