Iraq inks oil exploration deal

Iraq on Wednesday signed a deal with Russia's Lukoil and Japan's Inpex to explore an area believed to contain oil, the latest step in Baghdad's efforts to boost its role as a key global energy supplier. Under the contract, the two firms must invest at least $100 million to explore the 5,500-square-kilometre (2,100 square mile) block covering the provinces of Muthanna and Dhi Qar in south Iraq. "This contract represents the resumption of exploration work which stopped in the 1970s," said Abdul Mehdi al-Amidi, head of the oil ministry's contracting and licensing department. "We hope it will result in added reserves of oil, which is important for Iraq." Lukoil and Inpex won the contract in a May 30-31 public auction, agreeing to remuneration of $5.99 per barrel of oil-equivalent eventually extracted from the block, which is thought to contain oil. Iraq is looking to boost its energy reserves and place itself as a key global oil and gas producer, and has awarded several contracts to foreign firms that will dramatically ramp up oil output while also exploring the country for new sources of energy. It has proven reserves of 143.1 billion barrels of oil and 3.2 trillion cubic metres (111.9 trillion cubic feet) of gas, both of which are among the highest such deposits in the world.