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Iraq to develop Nassiriya 'after Nippon talks end'

Basra, February 28, 2010

Iraq plans to develop the Nassiriya oilfield on its own after talks with a Japanese group led by Nippon Oil Corp reached a dead end, the head of Iraq's South Oil said on Sunday.

Nippon and its partners, oil explorer Inpex Corp and engineering firm JGC Corp, had been negotiating the deal since the first half of last year but a final deal was held up by issues over financing.

"Talks with the Nippon group have reached a dead end, and we will start developing the field through national efforts," Dhiya Jaafar, head of the SOC told Reuters in an interview in the oil hub of Basra. Jaafar did not give more details.

The largely undeveloped Nassiriya field is listed as having reserves of under 5 billion barrels. Nippon Oil Corp had projected it could pump up to 200,000 bpd within two years, according to Iraqi officials.

Iraq plans to drill 10 oil wells in Nassiriya this year, Jaafar said. "We are capable of boosting production from Nassiriya from 10,000 bpd to 50,000 bpd by the end of 2010," he said.

Iraq's Oil Ministry has also agree with foreign oil firms to set baseline production levels for West Qurna Phase One and Zubair oilfields, Jaafar said.

Exxon Mobil and Royal Dutch Shell agreed to a baseline production level at the 8.7-billion-barrel West Qurna Phase One oilfield of 244,000 bpd.

Italy's Eni-led group agreed to set the baseline production level at Iraq's 4-billion-barrel Zubair oilfield at 183,000 bpd.

Iraq has struck a series of deals with foreign oil companies to develop its vast oilfields in a bid to boost production capacity to 12 million bpd, from around 2.5 million bpd now. – Reuters

Tags: Iraq | Basra | Talks | oilfield | Nippon | Nassiriya |

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