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Iraqi government makes deal with foreign oil majors

30/06/2008

The Iraqi government has drawn up contracts with five major Western oil companies to develop fields in the country, US media has reported.

The New York Times said the US state department played "an integral part" in brokering the deal, the first confirmation of direct involvement by the US in commercial Iraqi agreements.

The newspaper quoted a senior official at the department as saying American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the documents.

The source told the newspaper the US officials were only there to help the Iraqi oil ministry with technical points on the contracts, not to influence which companies were chosen.

The contracts are expected to be announced later today and are thought to be awarded to Exxon Mobil, Royal Dutch Shell, BP, Total, Chevron and several smaller companies.

Opening up Iraq's oil fields will be a huge source of revenues to the companies, at a time when the price is high.

The country has vast untapped oil resources but needs investment to modernise its oil infrastructure.

As security has improved in Iraq, oil production has increased. Production currently totals 2.5 million barrels a day, the highest since the 2003 US-led invasion of the country.