| 2008: Total nears Iraq oil service contract deal |
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April 11, 2008 Total is in the final stages of talks with Iraq for an oil service contract and the French group is also hoping investors from the Gulf region will buy into the company, Total’s chief executive said yesterday. Iraq could pay up to $500m for each of the five service contracts it is negotiating with oil majors, an Iraqi government advisor said last month. Iraq wants oil majors to boost its output by nearly a quarter through the contracts. “I know discussions are being finalized, but I don’t have a date for an announcement,” Total Chief Executive Christophe de Margerie said on the sidelines of an oil conference in Paris. “This is up to the Iraqi authorities.” BP, Royal Dutch Shell, and ExxonMobil are also negotiating for the two-year technical support contracts. BP said earlier this week it expected to ink the deal around mid-year. The contracts do not provide the long-term involvement the oil majors crave in Iraq’s oil sector, but will give them a head start in bids for future oil deals. “These are contract services,” de Margerie said. “This is necessarily a transitory stage, not a proper way to work over the long term.” Total was negotiating for the development of the West Qurna field along with US group Chevron, he said. Iraq has the world’s third-largest oil reserves and needs billions to revamp its oil sector after decades of war and sanctions. The service contracts are part of stop-gap measures to boost output in the absence of new legislation for foreign investment. Political feuding has stalled a vital oil law in Iraq for more than a year. Total’s chief executive said he was pleased a state-owned Chinese investment fund had bought shares in the company. The move to take a stake was not linked to projects in China, he said. He said he hoped funds from other countries where Total is active, in particular Gulf countries, would invest in the French group. “We have a strategy to diversify our shareholder base. We would like funds to come from countries where we have long-term relationships. This is why, besides China, we would like to have equivalent partnerships coming from certain Gulf countries.” Total’s shareholders already include state-owned investment funds from Norway, Singapore and the Middle East, a Total spokeswoman said last week. Meanwhile, Total hopes that funds from countries in which Total is active, in particular Gulf countries, will invest in the French oil major, de Margerie said. “We have a strategy to diversify our shareholder base,” de Margerie told reporters on the sidelines of an oil conference. “We would like funds to come from countries where we have long-term relationships. This is why, besides China, we would like to have equivalent partnerships coming from certain Gulf countries.” |