Iraq says it will pay two billion dollars dues to foreign companies

2016-03-05 00:59:00 | (Voice of Iraq) - Twilight News

Undersecretary of the Ministry of Oil blessing Fayyad said that Iraq will pay for foreign oil companies remaining arrears for 2015 in the amount of about two billion dollars in April next and expects to reach an agreement on contracts by the middle of this year.

International companies such as BP and Royal Dutch Shell, Exxon Mobil, Eni and Lukoil in the southern oil fields in Iraq and working under service contracts under which those companies to get a fixed - dollar fees for additional quantities produced.

These agreements and imposed severe pressure on Baghdad 's coffers as government revenues fell due to tumbling oil prices while Iraq is in talks with foreign companies to link the fees it collects for the development of crude prices fields.

A blessing in charge of upstream operations, told Reuters in an interview in the southern city of Basra , the oil - producing "average new agreement will help prevent inflate production costs and not to overburden the Iraq debt."

He said that one of the ways to reduce costs for companies is to deliver drilling operations to the Iraqi government exploration companies or hiring local workers rather than foreign workers.

Grace and predicted that the increase in production from Iraq in 2016 to be "very modest" due to reduced investment budgets for foreign companies affected by the fall in oil prices.

He added that it was likely to reach an agreement with PetroChina, Exxon Mobil and other energy companies by the end of this year about investing in a project that aims to boost production of small foreign fields.

It consists "Integrated Project South , " which is estimated to cost billions of dollars to build oil pipelines and storage facilities , and a project to pump water from the Gulf to maintain pressure and enhance oil recovery.

And it will contribute to investment companies in raising production from the fields of oil and Artawi River bin Omar and the construction of infrastructure and energy. He said that the grace of the scheduled use of revenues generated by increased production from the two fields in the payment of dues investors.

He noted the deputy minister that Iraq is working with BP to update the outdated facility to pump water in Karma , north of Basra to supply the oil fields of Rumaila, Zubair necessary to promote the production of water.

The project is currently pumping more than a million barrels of water per day and there are plans to increase production to three million barrels.

Iraq is in talks with foreign engineering companies to build a new oil port Barre to increase the export capacity of the country. And it will reach the export capacity of the new port to 2.5 million barrels per day.

He said a blessing , "we chose the right place for the port to export the new oil, which will ensure that we have the full flexibility to export oil additional product."