Iraq is in the final stages of agreeing on a draft of its $12 billion gas contract with Royal Dutch Shell PLC, the country's oil minister said Wednesday, allaying fears the project was mired in a legal dispute.
Speaking upon his arrival in Vienna for a meeting of the Organization of Petroleum Exporting Countries, or OPEC, Hussein al-Shahristani also said a planned bidding round for three major gas fields would go ahead as planned on Oct. 20 after being delayed twice before.
Asked about the reported delay of the Shell deal, Shahristani said: "We are in the final stages of agreeing on the draft before we take it on the cabinet again," adding "There has been no dispute" over the deal.
The Iraqi cabinet last month delayed the finalization of the project with Shell and Japan's Mitsubishi to capture gas from Basra's oilfields because of legal issues related to the joint venture, the website of Iraq Business News reported at the time. The cabinet already had approved the planned investment in June, but it is now waiting to sign the final draft once it is resubmitted by the oil ministry.
Shahristani said 13 companies had bought tender documents for the coming auction of the Akkas, Mansouriya and Siba gas fields.
"But I don't know how many are going to bid," he added.
Companies previously linked with the tender include Eni SpA (E, ENI.MI) and Edison SpA (EDN.MI), both of Italy, Japan's Mitsubishi, France's Total SA (TOT, FP.FR), South Korea's Kogas and Russia's TNK-BP Holding (TNBP.RS).
Iraq is intent on developing the fields to help boost its creaking levels of electricity supply, which still stand at only a few hours a day in some parts of the country.
Aiming to exploit estimated reserves of around 11.23 trillion cubic feet of gas in the three fields, Baghdad has already twice delayed the bids to accommodate foreign bidders, and has sweetened terms of the eventual deal.
It has promised to end the extra "signature bonus" payments of several hundred million dollars made by successful bidders in previous auctions, and will take or pay for all of the gas produced from these three fields.
According to Iraq's oil ministry, Akkas field in Anbar province has around 5.6 trillion cubic feet of gas; Mansouriya in Diyala province has reserves of about 4.5 trillion cubic feet; and Siba, located in Basra province, contains around 1.13 trillion cubic feet.
