BAGHDAD, June 28 The Iraqi government said it is
setting up a new oil company in the southeastern province of
Maysan with the goal of more than tripling oil production in the
region in the next five years.
The new Maysan Oil Company will be split from the Southern
Oil Company and established as a separate state-run firm, a
government statement, released late on Friday, said.
Together with the existing Northern Oil Company, Iraq will
have three state-run oil firms.
Oil Minister Hussain al-Shahristani said this week that each
Iraqi province producing at least 100,000 bpd would get its own
state-run oil company to focus on developing oilfields there.
The move is designed to expand oil activities in Maysan, a
large, oil-rich but poor province bordering Iran, and to achieve
the best use of the province's oil fields, the statement said.
Total oil output from Maysan province is between 100,000 and
110,000 barrels per day (bpd), the statement said.
"One of the targets of this company is to increase oil
production in this province in the coming five years to reach
360,000 bpd," it said.
Maysan province, which has six producing oil fields and five
not yet in production, had been "neglected and marginalised for
decades", the statement said.
The new company will have the authority to coordinate with
international companies to develop the province's oil fields
with the aim of increasing their capacity, it said.
The new company's functions will include oil and gas
production and exports through Basra. It will also provide
Maysan refinery with oil and supply oil and gas to power
stations, the statement said.
The new company will have capital of 9.5 billion Iraqi
dinars (about $8 million).
Oil is Iraq's primary source of revenue and high oil prices
will help it raise the billions of dollars it needs for
reconstruction after years of sanctions and war. Oil closed
above $140 a barrel in New York on Friday after touching a
record high of nearly $143.
Iraqi security forces this month launched an offensive
against Shi'ite militias in Maysan, reputed to be a
Iraq has the world's third-largest oil reserves at around
115 billion barrels, but it needs heavy investment to modernise
its oil industry.
Iraq's Oil Ministry said this week it had finished
negotiations with oil majors on six short-term oil service
contracts and hoped to sign the deals in the next month.
The deals are aimed at lifting output at Iraq's largest
producing fields by a combined 500,000 barrels a day.
Officials say Shahristani will announce on Monday which
producing fields will be open for long-term development
Shahristani told Reuters on June 1 that Iraqi oilfields were
pumping more than 2.5 million bpd, the highest since the 2003
U.S.-led invasion. Iraq would produce up to 2.9 million bpd by
the end of 2008, he said.
(Reporting by Waleed Ibrahim, Adrian Croft; Editing by Jason