Oil Minister: Saddam oil deal with China still in effect

Baghdad has revived a contract signed by the Saddam Hussein administration allowing a state-owned Chinese oil company to develop an Iraqi oil field, the Iraqi oil minister told the Financial Times in Beijing yesterday.

Hussein al-Shahristani also said Baghdad welcomed Chinese oil company bids for any other contract in the country through a "fair and transparent bidding process" to be laid out in the new oil law under discussion in Iraq's parliament.

China National Petroleum Corporation, the country's largest oil company and the parent of listed group Petrochina, signed a deal with Iraq in 1997 to develop the al-Ahdab oil field. The field is one of the first to be offered to foreign investors since the 2003 US-led invasion.

Iraq has been reluctant to revive Saddam-era contracts, but seems to have turned to China as security problems and uncertainties over Iraqi investment law have deterred other investors.

The field had an estimated pre-war capacity of 90,000 barrels a day and the 1997 contract was valued at about $1.2bn (€900m, £600m). "The contract with the previous administration is still valid - it was signed and we will honour it," Mr al-Shahristani said. "We have been talking since I visited China eight months ago and the Chinese have just submitted a revised proposal to meet the new technical requirements for oil field development laid out by the Iraqi government."

Read the rest at the Financial Times

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