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Iraq, Shell gas deal to be reviewed by new cabinet

The $12 billion deal is a venture between , Shell and Japan's Mitsubishi .

December 10, 2010 10:13 by

A multibillion-dollar gas deal between Iraq and Royal Dutch Shell  will be presented for ratification to the country’s new cabinet once it has been formed, Iraq’s Oil Minister said on Thursday.

“We are still negotiating the contract, we have not finalised it yet,” Oil Minister Hussain al-Shahristani told reporters after a graduation ceremony for Iraq’s oil police.

The $12 billion deal is a venture between Iraq’s South Gas Company, Shell and Japan’s Mitsubishi  and involves the capture of associated natural gas produced at fields near the oil hub of Basra, including Rumaila, Iraq’s workhorse.

Prime Minister Nuri al-Maliki is in the process of forming a new government expected to include all of the country’s main political factions.

Maliki has said he would pick his cabinet by mid-December. He has until Dec. 26 to form a government.

Shahristani also said he expected an initial contract for Iraq’s western Akkas gas field to be initialled soon, as the firms involved had been invited to Baghdad to initial the contract.

A deal to develop Akkas was won by South Korea’s KOGAS and Kazakhstan’s KazMunaiGas  in October, but the initial signing, originally scheduled for Nov. 14, was postponed.

Officials said the delay was to give the companies more time to look over the contract.

Iraq holds the world’s 10th largest gas reserves and flares 1 billion cubic feet of gas daily at its oilfields — fuel it needs to generate electricity in a country suffering chronic power blackouts more than seven years after the U.S.-led invasion.

Akkas has estimated reserves of 5.6 trillion cubic feet of gas.

(Reporting by Serena Chaudhry; editing by Keiron Henderson)

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