Western producers haven’t had access to oil fields in southern Iraq since 1972, when the country nationalized production including concessions owned by the companies now known as BP, Royal Dutch Shell Plc and Exxon.
The contracts awarded in two auctions, which pay a per- barrel fee for development work rather than granting a share in the production itself, will cost the companies a total of about $100 billion to develop deposits, Oil Minister Hussain al- Shahristani said in December. Iraq, with the world’s third- largest oil reserves, will earn about $200 billion a year.
A group led by BP, which vies with Shell as Europe’s largest oil company, will receive $2 billion per year in fees to develop the Rumaila field. A Shell-led group will get $913 million and a group led by Exxon, the largest U.S. oil company, will receive $1.6 billion per year. Each calculation is based on the agreed-to per-barrel fee times the maximum production level.
“We see this as the beginning of a long-term relationship with Iraq and will continue to look for further opportunities,” Andy Inglis, BP’s chief executive for exploration and production, said on a conference call March 2.
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