THE WALL STREET JOURNAL/DOW JONES NEWSWIRES: Shell Gains Platform For Possible Growth in Iraq: “The initiative is a prize for Shell, which is in a long queue of oil companies anxiously waiting to secure production contracts in a country that houses the world's second-largest oil reserves after Saudi Arabia and big potential for gas.” (ShellNews.net)
DOW JONES NEWSWIRES
Posted 19 October 2004
LONDON -- In a breakthrough in its strategy to gain a meaningful role in Iraq's oil-and-gas industry, Royal Dutch/Shell Group has been tapped by the Iraqi government to help formulate a blueprint for developing the country's moribund natural-gas sector.
The initiative is a prize for Shell, which is in a long queue of oil companies anxiously waiting to secure production contracts in a country that houses the world's second-largest oil reserves after Saudi Arabia and big potential for gas.
Those efforts have been stymied for years, first by sanctions and more recently by the rocky aftermath of last year's U.S.-led overthrow of Saddam Hussein. "It's impossible to invest there now for a variety of reasons, but we hope to build relationships through this initiative," said Piet Ruijtenberg, Iraq project manager for Shell Exploration and Production, adding that a team will be set up by the first quarter of next year.
Shell is doing the work at no charge. It gives the company unprecedented access to the oil ministry, allows it to build relationships with key players and aids its strategy to eventually develop the country's oil as well as its vastly underdeveloped gas sector.
It also might leverage the company's chances of claiming a lead role in the development of the Ratawi field in a huge oil basin near the southern city of Basra, which Shell has had an eye on for many years, analysts said.
For the moment, doing business in Iraq is virtually impossible. Until there is an elected government in place, the oil minister doesn't have the mandate to sign production contracts. The security situation also weighs heavily on most companies, preventing them from even setting up local offices in the capital.
Shell is 60%-owned by Royal Dutch Petroleum Co., of The Hague, and 40% by Shell Transport & Trading Co., of London.
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