BAGHDAD: Iraq’s cabinet on Tuesday approved a deal with Royal Dutch Shell and Japan’s Mitsubishi to capture gas being flared at southern oilfields, government spokesman Ali Al-Dabbagh said.
Dabbagh said the partners in the deal planned to invest $12 billion in the project, of which the Iraqi government will hold 51 percent, and had set a target to export 600 million cubic feet of gas per day.
The deal is for a venture in the Basra region to capture and use gas currently being burned off at southern oilfields of Rumaila, Zubair and West Qurna Phase One, he added.
"The Oil Ministry will sign the final agreement now that they have the cabinet’s approval," Dabbagh told Reuters. He did not say when the final contract would be signed.
The joint venture, named Basra Gas Company, would be at the forefront of Iraq’s plans to modernize its energy facilities and boost oil exports that hover around levels they were before the US-led invasion in 2003.
Shell, Europe’s largest oil company, signed in January final contracts for the development of super giant Iraqi oilfields Majnoon and West Qurna Phase One.
The deals are part of a series Baghdad has signed with international oil companies, in a bid to boost its crude output capacity to 12 million barrels per day (bpd), rivaling top oil producer Saudi Arabia.
Iraq’s proven natural gas reserves are 112 trillion cubic feet, a 2007 report from the US government’s energy statistics unit said.
