An Iraqi oil official claimed that the Iraqi government signed a deal on Thursday in Baghdad with British Petroleum (BP) and China National Petroleum Corp (CNPC) to develop its super-giant Rumaila oilfield, sources reported.
Reportedly, BP holds a 38 per cent stake in the venture, while CNPC has a 37 per cent share. Iraq's State Oil Marketing Organization controls the rest.
Under the contract, CNPC and BP will be jointly responsible for crude production of Rumaila field, and the Iraqi Government will pay service charges to the two companies in accordance with the actual production of the oilfield measured as barrel. The contract term is 20 years, and can be extended for 5 years. CNPC and BP are scheduled to start operation in November.
Rumaila oilfield, located in the southern part of Iraq, boasts 17.7 billion barrels of crude reserve. It is the largest project among Iraq’s 6 oil blocks accessible to overseas oil developers this time.
The conglomerate led by BP and CNPC won the bid for Rumaila Oilfield at the end of June. The exploration qualification bidding is the first of its kind for overseas oil developers since 1972. According to relevant agreements, foreign developers are entitled to delivering exploration services and collecting service charges, yet without the ownership of crude.