Angola firm initials two deals for Iraq oil fields

Angolan energy firm Sonangol initialled two deals with Iraq yesterday to develop oil fields in the north of the country, oil ministry spokesman Assem Jihad said.

The two agreements completed the initialling of seven deals reached between Baghdad and foreign energy firms ear-lier this month that aim to ramp up Iraq's oil output five-fold.

"The ministry finished the initialling of all the seven contracts... and the papers will now be sent to the council of ministers for reading, checking and approval," Mr Jihad said in a statement.

Sonangol's two contracts with Baghdad will be for the Najmah and Qaiyarah fields in Nineveh province, northern Iraq.

The firm is aiming to increase production at Najmah, which has known reserves of 858 million barrels of oil, to 110,000 barrels per day and will be compensated $6 per barrel extracted.

It is also looking to raise output at Qaiyarah, which has proven reserves of 807 million barrels, to 120,000 bpd. It will receive $5 per barrel extracted.

The Iraqi government reached the deals during a two-day oil field auction which dramatically increased the country's projected crude production to 12 million bpd within seven years, from around 2.5 million bpd presently.

Iraq has the world's third largest oil reserves, behind only Saudi Arabia and Iran, with an estimated 115 billion barrels.