Iraq inks exploration deal with Pakistan Petroleum
Under the contract, the firm must invest at least $100 million to explore the 6,000 square-kilometre block covering the provinces of Wasit and volatile Diyala.
"The oil production (and) the gas production from this block will not only help the Iraqi economy, it will help the Pakistani economy also," Pakistan Petroleum chief executive Asim Khan told reporters.
"It will be a step forward from this project to other projects at national level. Inshallah (God willing), this is the beginning and we would like to see more projects."
Khan said he was not concerned by instability in Diyala province, which remains one of Iraq's most violent even as attacks have lessened nationwide in recent years compared to the country's bloody sectarian war from 2006 to 2008.
"These are not going to stop or hinder our work programme," he said. "We will overcome the security."
Pakistan Petroleum won the contract in a May 30-31 public auction, agreeing to remuneration of $5.38 per barrel of oil-equivalent eventually extracted from the block, which is thought to contain gas.
Baghdad is looking to increase its gas production to help power electricity generation stations. The country is suffering from a years-long electricity shortfall that is a persistent complaint of Iraqis.
Iraq has proven reserves of 143.1 billion barrels of oil and 3.2 trillion cubic metres of gas, both of which are among the highest such deposits in the world.
COMMENTS (12)
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So funny, the deal is that " the firm must invest at least $100 million ".. there is a "MIST" clause added, which automatically enlists penalty on pakistan if they fail on their promise, which is the most likely case here. Our oil comps are bleeding, they dont even have money to pay our public and industry, and this comp has signed deal to explore, which is a heavy capital intensive job. This is height of nonsense. How much money was put into swiss account of the ministers and company honchos?
@Khurram Awan: Its amazing that you do not see the difference between Multi Billion $ companies operating from decades around the world and well established with some one who doesn't have their first food on the ladder even. You can't sell Vespa scooter for the price of Bugatti Veyron.
@Pakistani Politics, this is how companies develop, the huge american oil comapnies, they are multi billion industries based on international market. Our comapnies need to horizon their markets. That is why i am open to trade with India, our comanies can make a difference in that huge market. Although i am strictly against bollywood and indian channels.
@Pakistan politics:
The profits from the exploration will eventually come to Pakistan.
The only difference between buying Iraqi oil and drilling for Iraqi oil is the cost/risk factor - your still exporting hard currency in exchange for fuel - you might be better off exploiting Pakistani resources.
Why dont we invest that money in our own country for exploration and minning, we need it more than them
It is very brave and true decision of PPL to venture out in Iraq. And we must also credit PPP government and the Minister for Petroleum, Dr. Asim in the this regard.
Pakistani companies should also invest in international ventures.
iraq has enough oil....is it not the americans coming disguised to pump our oil??...they have already pumped our blood
I don't think such news should be headlines on main page. These steps are key to national economic progress. It is enough if they are located in the business section. Not all the people reading these news are well wishers.
Remuneration of $5.38 per barrel is a very low rate especially if you are operating in volatile regions. In Pakistan International Oil companies have remunerations in excess of 10$ in many blocks.