Statoil plans to invest $1.4b in Iraqi oil fieldOSLO: Norway's Statoil will invest $1.4 billion in Iraq's West QurnaPhase Two over the next four to five years and hopes to book somereserves from the field, its head of international operations said.
Statoil and Russian partner Lukoil have saidthey will make money out of one of the world's largest untappedsupergiant fields with the remuneration fee of $1.15 per barrel, thelowest agreed in Iraqi bidding rounds last year.
"The Iraqis have come up with a fair conceptwhere the level of compensation is determined by the bidders," PeterMellbye, Statoil's head of international exploration and production,told Agencies in an interview.
Analysts say the terms for Iraq's oil deals aretight, but could give oil companies better access to as-yet undevelopedreserves and other oil deals in the future.
"We are not looking at margins like on aconventional project, but then again, we are not talking about the sametype of risks," Mellbye said, pointing to limited exploration risk andnot having to commit to a specific investment level.
Statoil and Lukoil have pledged to boost fieldoutput to a plateau target of 1.8 million barrels per day. Lukoil hassaid investments will be in the billions of dollars.
Mellbye said Statoil would invest $1.4 billionin the field over the first four to five years, based on its 25 percent stake, aiming to quickly boost production.
"Part of the trick is to get revenues going in just a few years," he said.
West Qurna Phase Two has estimated reserves of12.9 billion barrels of oil. Mellbye said Statoil had an entitlement ofaround 200 million.
"I don't want to get into a debate about USsecurities rules ... but I wouldn't be very surprised if it will bepossible to book this," he said. Venezula slightly softened conditionsfor the auction in November and is due to accept offers in Januaryaccording to the latest deadline.
"We made it clear what we feel needs to be doneto the terms to make it attractive," Mellbye said. "Venezuelanauthorities have done something, but not enough."
In the last three months state oil companyPDVSA has been forced to stop three of the projects nationalised in2007 which upgrade the tar-like oil from fields adjoining the northernedge of the Orinoco River into exportable crude.
Agencies