Iraq Development Program - BP hopes to sign Iraq service contract mid-year

BP hopes to sign Iraq service contract mid-year (08/04/08) BP Plc hopes to sign within a few months a service contract designed to boost output in Iraq by 100,000 barrels per day (bpd), a senior BP executive has said.

		The deal is one of five that Iraq is negotiating with oil majors to boost output by 500,000 bpd, or nearly a quarter, from its largest oil fields. Iraqi officials had hoped to sign the deals by early April. "I'd say we might sign around the middle of the year," said Steve Peacock, president of BP's Middle East and South Asia exploration and production unit. "These are active discussions with serious intent, there is no sense that they've stalled or reconsidered, it's just taking longer than anticipated."
Payment terms for the service contracts were yet to be concluded, Peacock said. Iraq has said each contract could be worth up to $500 million. Iraq wants to sign two-year technical service contracts with oil majors as part of stopgap measures to boost oil production in the absence of a vital oil law. Legislation to set the terms and extent of foreign investment in the country has been stalled in parliament for more than a year. "In this politically sensitive and difficult situation service contacts are a pragmatic step forward for Iraq," Peacock said. Majors would prefer contracts that offer long-term involvement in Iraq and were looking for a link in the service contracts to future development of Iraq's giant oilfields. Source: Reuters

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