Eni Mulls Opening Iraq Business to China's CNPC

Source: Reuters 3/27/2013, Location: Middle East

Italian oil and gas group Eni is considering opening its business in Iraq to investment by Chinese oil company CNPC after offering it a stake in its bumper Mozambique gas field earlier this month, two sources said.

The sources, one close to the deal and the other governmental, added that no talks were yet under way with the Chinese group. "The idea is being examined, though we have not yet reached that point," one of the sources said.

Eni declined to comment.

Two Iraqi oil ministry officials said they were not informed by Eni of any intention to sell part of its stake in the Zubair oilfield to CNPC or any other company.

In 2012, Eni Chief Executive Paolo Scaroni said the major's enthusiasm in Iraq was on the wane because of difficulties in the country. But the company confirmed its commitment to Iraq after Scaroni visited Prime Minister Nuri al-Maliki.

Violence in Iraq has eased since the height of the war in the country, though security remains a concern.

On March 14, Eni said it had agreed to sell a 20 percent stake in its Mozambique offshore gas acreage to CNPC in a $4.21 billion deal, giving it extra funding and reducing its share of the development bill.

At a meeting in Ravenna earlier this month Scaroni said no talks were under way with CNPC or other possible partners with a view to helping fund operations in Iraq.

China National Petroleum Corp (CNPC) is the parent of China's second largest refiner PetroChina .

Eni, U.S.-based Occidental Petroleum Corp and South Korea's KOGAS signed a 20-year deal with Iraq in 2010 to develop the Zubair oilfield, where production is around 270,000 barrels per day (bpd).

The consortium expects to invest $18 billion in the field.

In January 2013 head of state-run South Oil Co said a group led by Eni was in final talks with Iraq to cut the Zubair production target to 1 million bpd from 1.2 million bpd.

For more information about related Opportunities and Key Players visit Iraq Oil and Gas Projects


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