RDS-A, XOM, BP
Many of the World's biggest Oil companies may have to
surrender most of the Nat Gas from Iraq's vast southern Oilfields
to a processing and export project led by Shell, a final draft
contract between Baghdad and Europe's biggest company.
Oil Giants including Royal Dutch Shell (NYSE:RDS-A), BP (
), U.S.-based Exxon (
), China's CNPC, and Italy's Eni (MI:ENI) signed technical
service contracts to develop 3 oilfields in Southern Iraq in
But the Oil deals to develop the Zubair, Rumaila and West
Qurna 1 fields near Basra oblige the Big Oil contractors to
surrender the Nat Gas they do not use for re-injection or power
generation to Iraq's state-run South Gas Co (
Under the US$17-B Nat Gas deal to be ratified by the Iraqi
cabinet, Baghdad has pledged to do what it takes to ensure these
fields supply the Shell-led Basra Gas Company (
) Joint Venture with all the raw Nat Gas and Nat Gas liquids (
) it needs, including for an LNG export plant.
"SGC shall procure that all raw Nat Gas produced from the
dedicated fields, other than utilized Nat Gas but including all
NGLs, shall, on and from commencement of operations, be dedicated
solely to the venture," the contract reads.
"The Ministry shall ensure that SGC fulfils its obligation to
supply and make available to BGC all committed volumes and
planned volumes of raw gas, including by making available deficit
volumes as needed," said a letter of confirmation from the energy
ministry attached to the contract.
Under the terms of the oil contracts, SGC owns all the Nat Gas
not used for Crude Oil recovery or power generation at the Oil
With production from some of the World's largest
underdeveloped Oilfields expected to rise over the next decade as
Iraq boosts capacity toward 12-M BPD, there is likely to be much
more Nat Gas than the Country needs before long.
The other Big Oil companies could propose alternatives for
using some of it and some are understood to be considering their
own Nat Gas projects.
But the Oil ministry's confirmation letter attached to the
deal said the government will make sure SGC meets its side of the
supply deal and ensure that other parties do not prevent it from
doing so, including "not permitting any other entity to do a
Shell declined to comment.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red
Roadmaster's Technical Report on the US Major Market Indices, a
weekly, highly-regarded financial market letter, read by opinion
makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and
stock markets since 1984, following a successful business career
that included investment banking, and market and business
analysis. He is a specialist in equities/commodities, and an
accomplished chart reader who advises technicians with regard to
Major Indices Resistance/Support Levels.