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Sonangol says several firms eyeing Iraq tieup

Baghdad, December 18, 2009

Angola's national oil firm Sonangol, which won deals to develop oilfields in Iraq last week, said several companies have shown an interest in forging joint-exploration partnerships with it in the war-torn nation.

Sonangol won the rights to explore the Qayara and Najmah oilfields in Iraq - the smallest on offer in a two-day auction for 10 fields. It said in a statement on Friday that the fields had over one billion barrels of oil reserves.

'Several companies have already shown an interest in forging partnerships to explore these reserves,' Sonangol said in the statement published on Angolan state-owned news agency Angop.

With little capability to drill for oil at home, let alone in Iraq, analysts say Sonangol is very likely to partner with one or more oil companies to help it develop the two oil fields.

The oil fields offered the highest per-barrel remuneration fees at the auction on December 12 - $5 for Qayara and $6 for Najmah. The higher fees reflect the smaller size of the fields and the lower quality oil they will produce.

It may also indicate the difficulties facing Sonangol in a dangerous corner of Iraq, still grappling with post-war violence. The nearby city of Mosul is one of the most violent cities in the country.

Sonangol said the move to drill abroad was part of a strategy to bolster Angola's global image. The oil company is also eyeing exploration opportunities in Brazil, Ecuador and the tiny African island state of Sao Tome and Principe.

Angola emerged from an almost three-decade long civil war in 2002 to rival Nigeria as Africa's top oil producer. It currently holds the rotating presidency of the Organization of the Petroleum Exporting Countries.

Sonangol said it expected to sign the contract to explore for oil in Iraq next year.-Reuters




Tags: Iraq | partnership | sonangol |

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