Major Iraq win for energy consortium

The post-war carve-up of Iraq’s oil reserves moved up a notch yesterday, when dealmakers from the world’s largest energy firms assembled in Baghdad to bid for some of the country’s most prized assets.

Royal Dutch Shell and Malaysia’s Petronas secured rights to develop one of the planet’s largest remaining untapped oil fields, the massive Majnoon field in the Basra region. Experts believe the deal provides an important foothold in a state that potentially has huge unexploited energy resources.

The Shell-Petronas joint-venture beat a consortium of Total and China National Petroleum (CNPC) to develop Majnoon, which has 12.6billion barrels of oil and is expected to eventually produce up to 1.8million barrels per day. Some 15 fields were up for grabs yesterday and today, representing about one-third of Iraq’s reserves, however, five fields in troubled parts of the country have been withdrawn and another attracted just one bid.

The selloff comes 30 years after former Iraqi leader Saddam Hussein nationalised the oil sector and kicked out foreign firms.

An initial auction in June saw Iraq secured just one deal out of eight oil and gas assets put out to tender, with BP and CNPC securing rights to develop the Rumaila field.

Baghdad desperately needs the billions of dollars of revenue these and other deals will generate to rebuild after decades of war, international sanctions and years of neglect and sabotage. Executives from the world’s top oil companies are braving security threats to take part in the auctions. Iraqi army helicopters buzzed overhead yesterday, while convoys of armoured vehicles carrying oil bosses hidden behind tinted windows made their way through Baghdad.

Police trucks and squads of police dressed in commando gear lined the streets leading to the oil ministry, blocking off many side roads.