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Iraq Nears Service Deals With Western Oil Companies

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The Associated Press

Published: June 20, 2008

BAGHDAD - Iraq is close to signing oil service deals with several major Western oil companies in an effort to boost its output capacity, the country's oil ministry said Thursday - the first major Iraqi contracts with big Western companies since the 2003 U.S.-led invasion.

The deals, once signed, are something of a stopgap measure to help Iraq begin to increase production until the country is able to approve a new national oil law - now held up by political squabbles among Sunnis, Shiites and Kurds.

But they also could mark the beginning of an important long-term toehold by big Western companies into Iraq's potentially lucrative oil industry, by giving the companies a bidding advantage over other companies in the future.

Iraq's oil ministry spokesman would not name the companies set to get the deals.

But in December, four major companies - Royal Dutch Shell PLC, BP PLC, ExxonMobil Corp. and Chevron Corp. - submitted technical and financial proposals for the five oil fields and received counterproposals from the Iraqi side.

The New York Times reported Thursday that Shell, BP and Exxon Mobil, plus Total, were the four major companies close to signing deals, along with Chevron and some smaller companies.
Ministry spokesman Assem Jihad told The Associated Press in a telephone interview that the names would be announced June 30.

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