Iraq will sign by the end of January an agreement with Royal Dutch Shell Plc and Mitsubishi Corp. for the capture of associated gas at oil fields in the country’s south, the director-general of Iraq’s South Gas Co. said.
The agreement will be signed “either next month or the one after at the most,” once legal details are resolved, Ali Hussain Khudair said today in an interview in Basra, Iraq.
The government gave initial approval on June 29 for the creation of a joint venture with Shell and Mitsubishi to be called Basra Gas Co. The venture would be owned 51 percent by state-run South Gas, with Shell holding 44 percent and Mitsubishi the remaining 5 percent.
A foreign consulting firm is working to settle issues related to the venture’s establishment, Khudair said, without identifying the company.
“Once the agreement is signed, it will be referred for approval to the Iraqi Council of Ministers,” he said.
Iraq wants foreign investors to help it increase production of oil and gas to stimulate a recovery after years of conflict and economic sanctions. Iraq has the world’s fifth- largest oil reserves, and its gas reserves rank fifth in size in the Middle East, according to data from BP Plc.
