BP and Shell among first foreign firms agreeing to take Iraqi 
crude 
  
By OGJ editors

HOUSTON, July 30 -- BP PLC and Royal Dutch/Shell Group are among 
the first foreign firms to agree to term contracts outlining 
crude oil exports from Iraq, the OPEC News Agency (OPECNA) 
reported.The two majors are among 10 international companies 
expected to receive Iraqi crude, produced from the southern 
fields around Basra. Meanwhile, the Organization of Petroleum 
Exporting Countries meets in Vienna Thursday to consider its 
production quotas.World oil markets have already factored into 
current prices the general expectation that OPEC members will 
maintain production quotas at current levels, analysts said. 
However, some said reports late Tuesday that Iraq has increased 
its oil production to 1 million b/d could trigger additional 
sales of oil commodities.

Iraq's oil production previously was projected at 300,000-400,000 
b/d for the second quarter of 2003. Shortly before its invasion 
by US-led coalition forces, Iraq's oil production had fallen to 
2.7 million b/d from its pre-1990 capacity of 3.5 million b/d. 
Iraq's prewar domestic demand was roughly 500,000 b/d (OGJ 
Online, July 1, 2003). 
Iraq previously made spot oil sales since Saddam Hussein was 
deposed. The current contracts represent the first time that Iraq 
has committed to deals involving the export of oil for several 
months. 
Iraq's State Oil Marketing Organization (SOMO) said contracts won 
by BP and Shell were the first to offer on-going supply 
arrangements. The deals were awarded after a tendering process 
run by Iraqi oil officials. 
Under the deal, Iraq will supply 645,000 b/d of crude from its 
port of Mina al-Bakr starting in August and ending in December. 
That would represent an increase on the 450,000 b/d produced in 
July, OPECNA said. 
Iraq's oil export figure is expected to continue growing 
throughout the year. 
 
  
 
 

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