Shell, Iraq Agree on $4 Billon Deal
Dutch Royal Shell, the Anglo-Dutch energy company, has agreed to a joint gas venture with the Iraqi government, the Iraqi oil Ministry announced on Tuesday. The will be signed next month.
Under the deal gas will be extracted from Iraqi fields, and will be sold both in Iraq and abroad.
It is the first deal between a Western oil company and the Iraqi government since the US-led invasion in 2003, which pushed Saddam Hussein out of power.
Shell will work together with the Southern Oil Company, which is owned by the Iraqi state. The Iraqi company will own 51% of the shares, Shell 49% thereby ensuring that the money made also goes back to the Iraqi people, not merely to Westerners.
Ministry spokesman Assem Jihad told the AFP that the deal is for the long term “because the investment to extract is a long process.”
To Jihad, the deal signifies a change in the attitude of Western companies to his country. Security used to be a deterrent but now companies feel that security has improved and this will encourage others to come in,” he said.
Shell is not the first foreign company agreeing to a deal with Iraq. China did the same last month. Iraq and China agreed to exploit oil, reviving a ‘1997 contract granting China rights to develop the Al-Ahdab oil field in central Iraq. ‘
