THE WALL STREET JOURNAL/DOW JONES NEWSWIRES: Shell Says To Help Iraq Oil Min Develop Gas Master Plan: “Oil major Royal Dutch/Shell won approval from the Iraqi Oil Ministry to help develop a gas master plan, the Iraq project manager for Shell Exploration and Production said Friday.” (ShellNews.net)
DOW JONES NEWSWIRES
Posted 16 Oct 04
LONDON -- Oil major Royal Dutch/Shell won approval from the Iraqi Oil Ministry to help develop a gas master plan, the Iraq project manager for Shell Exploration and Production said Friday.
The plan for dealing with Iraq's associated and non-associated gas, is expected to take around a year to formulate, depending on how detailed it will be Piet Ruijtenberg told Dow Jones Newswires in a telephone interview.
"They've just given us the go-ahead and we will be setting up the team by the first quarter of next year," Ruijtenberg said.
Shell, a global leader in gas development, has already helped other countries to develop a strategy for dealing with its gas reserves and is the only company that will be working with Iraqis on this particular plan.
Iraq, which has the second largest oil reserves in the world after Saudi Arabia, aims to double its oil production in the coming years.
But the country has done little to exploit its current gas reserves or explore for more, preferring instead, during the Saddam era, to focus on crude oil.
Iraq's gas reserves are currently estimated at 110 trillion cubic feet, but could be up to triple that figure, according to U.K. consultancy Bayphase Ltd.
"Iraq has a lot of gas, but only around 10% of it is non-associated, the rest is associated gas when oil is produced," said Ruijtenberg.
Instead of flaring the gas, some of the blue fuel could be used domestically for power generation for local industry, desalination plants and for export, he said.
"Any investor in Iraq's oil would need to find a solution for flaring and it would need to be coordinated," he said.
Although a Shell spokeswoman made it clear that the Gas Master Plan won't contain any contracts or commitments for future development, it does help the company get its foot in the door by building solid relationships now. Shell has also been working closely with Iraq's oil industry in the past few years training technical staff and isn't being paid for advising on the Gas Master Plan.
"In the long term, Iraq is an important player and we want to be present there," Ruijtenberg said. "It's impossible to invest there now for a variety of reasons, but we hope to build relationships through this initiative," he added.
The Shell agreement isn't one of several technical contracts currently being bid out by the Iraqi Ministry of Oil for specific field work. That tender is expected to be awarded in November.
-By Selina Williams, Dow Jones Newswires; +44 207 842 9262;