Iraq seeking help to develop oil

Iraq is set to announce a series of contracts with foreign oil companies in an effort to boost output of its key export commodity.

US and European firms will be asked to provide technical expertise to help Iraq increase daily production by up to half a million barrels.

Output is at its highest since the 2003 invasion but huge investment is needed to modernise its oil infrastructure.

Iraq has reserves of about 115 billion barrels, the world’s third largest.

Reuters reported that foreign firms would be asked to assist in the development of six oil fields – Rumaila, Kirkuk, Zubair, West Qurna, Bai Hassan and Maysan.

Reports have suggested that firms such as Exxon Mobil, Shell, Total and BP will be involved although there has been no official confirmation of the identity of Iraq’s chosen partners.

Greater stability

The reduction in violence in much of the country over the past year has helped the oil sector achieve greater stability.

Production currently totals 2.5 million barrels a day, the highest since the 2003 US-led invasion of the country.

On Saturday, Iraq announced it was setting up a third state-owned oil business to expand production from the Maysan region in the south east of the country.

Iraq hopes to increase output to 2.9 million barrels by the end of 2009 and has more ambitious plans for developing the industry to help fund long-term reconstruction.

With oil prices at record levels and, according to many experts, set to rise further, the prospect of increased output from Iraq will provide some comfort amid growing worries about whether global supplies can meet long-term demand for oil.

The BBC’s Nicholas Witchell in Baghdad said officials hoped the presence of firms of such stature would help not only make the industry more productive but encourage other foreign businesses to invest in Iraq.