National

Regional

Taiwan, HK, Macao

Special Coverage

Focus

Society

Profiles

CNPC-BP consortium wins bid for Iraqi oil field

By Hou Lei (chinadaily.com.cn)
Updated: 2009-07-01 11:39

A consortium led by the Chinese National Petroleum Corp (CNPC) and British giant BP PLC (BP) won the deal to develop the Rumaila oil field in southern Iraq on Tuesday.

General view of an oil refinery in the southern Rumaila area. Energy giant BP and China's CNPC International Ltd have been unveiled as the first foreign firms in decades to win contracts to invest and develop in Iraq's war-battered energy sector. [Agencies]

The consortium grabbed Iraq’s first oil fields development contract to foreign capitals since 1972.

Related readings:  PetroChina buys 45% stake in Singapore Petroleum  PetroChina, ExxonMobil wrap up talks on LNG receiving terminal project  CNPC buys Kazakh oil company  CNPC plans Canadian oil firm buy  Shell in talks with China on Iraq oil

Eight of the world’s top 10 non-state oil producers were among more than 30 companies vying for $16 billion worth of technical service contracts.

An international consortium led by US giant Exxon Mobil won the bid for Rumaila but later rejected the Iraqi government's proposed higher cost of production per barrel.

Under the service contracts, companies winning the bid would be paid by Iraq a per barrel fee for any crude they produced in excess of a minimum production target.

The BP/CNPC alliance agreed to develop the field at a cost of $2 a barrel for excess production, lower than the US$3.99 BP and Exxon initially bid. The Exxon Mobil-led consortium offer was US$4.8 per barrel, according to an earlier report from Reuters.

Rumaila holds 17.8 billion barrels in crude reserves, making it the biggest oil field in Iraq.

Iraq failed to strike deals on the remaining seven oil and gas fields in the auction.