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Iraq to Sign $1.2 Billion Oil Deal with China

Iraqi minister of oil Hussein al-Shahristani announced that Iraq was about to sign its first international oil deal since the fall of Saddam Hussein, a $1.2 billion oil service contract with China. The deal covers a small field producing about 90,000 b/d and replaces an earlier production deal signed in 1997 with the China’s National Oil Company.

Elsewhere, a senior Iraqi official accused the major oil companies of “human failure” for seeking to burden the government with huge cost factors. The Iraqi minister of electricity, speaking a press conference in Moscow, said the international oil companies have demanded “unreal charges” for their services, thinking that Iraq was ignorant of the real market situation.

Lukoil, the giant Russian oil companies, signed a $4 billion service agreement with the government of Saddam Hussein 10 years earlier, but the agreement was declared null and void upon the invasion of Iraq. Iraq has invited Lukoil to bid with other international oil companies for contracts with the Iraqi government.

Al-Quds al-Arabi, August 20, 2008; al-Rafidayn, August 21, 2008

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