Iraq inks 3rd exploration deal this week

Iraq on Thursday signed a deal with Russia's Bashneft and Britain's Premier Oil to explore an area believed to hold oil, the latest step in Baghdad's efforts to boost its role as a global energy supplier. Under the contract, the two firms must invest at least $120 million to explore the 8,000-square-kilometre (3,100 square mile) block covering the provinces of Muthanna and Najaf in south Iraq. The agreement is the third to be finalised this week, after similar exploration deals with a consortium of Lukoil and Inpex on Wednesday, and with Pakistan Petroleum on Monday. Following a May 30-31 public auction of oil and gas exploration blocks, Bashneft and Premier Oil agreed to a remuneration fee of $5 per barrel of oil equivalent eventually extracted from the area. "This project represents a new step in the oil ministry's efforts to develop the production of oil and gas" in Iraq, said Dhia Jaafar, head of Iraq's state-owned South Oil Company. 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.