Iraq's Basra Oil Company and Chevron signed an agreement to start oilfield development, with plans for a new energy company and a refinery, according to the country's oil ministry.
The deal includes preliminary studies, after which an energy company will be established. It will execute field development and feasibility studies will be carried out in addition to gas processing and the setting up of an oil refinery, Basra Oil Company director general Ihsan Abdul Jabbar was quoted as saying on the ministry website.
Iraq, the region's second-largest oil producer accounting for 8.8 per cent of global reserves, is ramping up efforts to increase production following the defeat of ISIS.
Oil revenues are integral to reconstruction efforts by Baghdad, which is overwhelmingly reliant on crude sales for government expenditure.
Basra Oil Company, which oversees the development of Iraq's southern oilfields, will not bear "any financial consequences or obligations", the ministry said, adding that Chevron had taken full responsibility for study and development plans.
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The agreement with Chevron follows the recent award of a $370 million (Dh1.35 billion) engineering, procurement and construction contract to Petrofac, listed in London, to expand crude processing facilities associated with the Majnoon field in southern Iraq.
The energy services company is contracted to deliver two crude processing trains with a capacity of 200,000 barrels per day in 34 months.
The Iraqi oil ministry earlier this month also met a delegation from Italian oil company Eni to discuss opportunities in Basra’s energy sector. Eni is a stakeholder in the southern Zubair field.
Iraq also took over development of the Mansuriyah gasfield near the Iranian border, putting its state-run firms in charge after the “delay and failure” of international companies to resume work at the field, the ministry said this month.
