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News // Oil and gas worldwide

Iraq Signs Initial Deals For Mansouriya, Siba Gas Fields

29 November 2010 , 11:04Rigzone2437

A third deal with a consortium led by Korea Gas Corp. (036460.SE) to develop Akkas, the largest of the three gas fields awarded in a bid round last month, was postponed until an unspecified time.

TPAO is partnered with Kuwait Energy and Korea Gas Corp. for the Mansouriya field, which is located in eastern Diyala province near the Iranian border and has estimated proven natural gas reserves of 4.5 trillion cubic feet, according to oil ministry figures.

The Turkish company owns 50% of the venture, Kuwait Energy holds 30% and Kogas holds 20%. The three firms have promised to reach a production plateau of 320 million cubic feet a day of gas for a fee of $7 a barrel of oil equivalent.

Kuwait Energy is partnered with Turkish Petroleum International Co., or TPAO, for the Siba field, which is located in the southern Basra province and has estimated proven reserves of 1.13 trillion cubic feet.

The Kuwaiti company owns 60% of the venture while TPAO holds the remaining 40%. The two firms promised to reach a production target of 100 million cubic feet a day for a fee of $7.5 a barrel of oil equivalent. TPAO said the group would invest $1 billion in the project.

The two deals still need the approval of the Iraqi cabinet before their final signature, oil ministry spokesman Assem Jihah told Dow Jones Newswires by telephone from Baghdad.

The deals were signed in Baghdad by Iraq's Deputy Oil Minister Abdul Kareem al-Luaibi for the Iraqi side, while executives from the two firms signed for their companies, Jihad said.

The Iraqi Oil Ministry postponed signing an initial deal with a group led by Kogas to develop Akkas in the western Anbar province for an unspecified time owing to some clarifications, a senior Iraqi oil official said.

The deal was supposed to be signed Sunday, but it was postponed at the last minute, Sabah Abdul Kadhem al-Saedi, deputy head of the ministry's Petroleum Contacts and Licensing Directorate, told Dow Jones Newswires.

"The company [Kogas] has asked for some clarifications before signing the contract and we are working on them," he said.

Kogas and its partner Kazakhstan's KazMunaiGas EP JSC (RDGZ.KZ) were awarded the field, located in the restive western Anbar province near the border with Syria, at a bidding round held in Baghdad last month. They promised to reach a production target of 400 million cubic feet a day from Akkas with estimated proven gas reserves of 5.6 trillion cubic feet for a fee of $5.50 a barrel of oil equivalent.

South Korea's government in a statement last month said total investment in the Akkas project would reach $4.4 billion.

Iraq, which has the world's 11th largest proven gas reserves, estimated at 112.6 trillion cubic feet, aims to use its three fields to fuel its power stations, generating much-needed electricity.

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