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Oil companies offer to cut 2015 spending in Iraq

Screen Shot 2015-01-29 at 13.58.27

Screen Shot 2015-02-18 at 13.17.14* Iraq seeks to stem losses from falling oil prices

* Calls on firms to reduce development costs

* Baghdad seeks amended contracts to “share risk”

* Says companies should maintain output despite changes

MR_Story By Ahmed Rasheed

BAGHDAD, March 12 ( Reuters ) – Oil companies have proposed millions of dollars of cuts in development spending in Iraq, a senior oil ministry official said, after Baghdad told them low oil prices and its fight against Islamic State had made payments difficult.

In a series of letters sent to companies such as Royal Dutch Shell, BP and Exxon Mobil since January, seen by Reuters , the oil ministry set out the need for change in response to “the rapid drastic decrease in crude oil prices.”

The slump in crude prices to below $60 a barrel from $115 in June has slashed government revenues in Iraq, OPEC’s second biggest exporter, just as it faces economic crisis triggered by Islamic State’s seizure of north and western provinces and surging expenditure to fund a military counter-offensive.

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