Iraqi Government Signs Oil Services Joint Venture Agreement with The UK's Mesopotamia Petroleum

Source: www.gulfoilandgas.com 2/26/2009, Location: Middle East

The Iraqi Government and Mesopotamia Petroleum Company Limited (MPC) are pleased to announce that they have signed today a joint venture agreement between MPC and the Iraqi Drilling Company (IDC), the Iraqi state-owned drilling company.

The joint venture, which will be majority Iraqi owned (51% IDC, 49% MPC), will be known as Iraqi Oil Services Company LLC (IOSCO) and has been created for the purpose of drilling a large number of new wells and thereby significantly increasing oil and gas production in the Republic of Iraq. This is the Iraqi Ministry of Oil’s first joint venture agreement of its type signed with a foreign company since the fall of the regime of Saddam Hussein in 2003.

IOSCO’s main objectives will be to provide integrated drilling operations in Iraq for the state-owned oil companies, together with international companies granted licences in any forthcoming licensing rounds. The parties to the joint venture intend to invest a total of $400 million to enable IOSCO to purchase and operate 12 new drilling rigs and for provision of logistical support and working capital in order to deliver state-of-the-art performance in its operations. Furthermore, IOSCO is committed to playing a leading role in developing local Iraqi expertise and resources in all aspects of the joint venture including integrated drilling technology.

MPC’s experienced team possesses the critical technical and management skills essential to achieving success in upstream sector projects. MPC’s role in the venture will be focused on project and business management using the latest techniques developed within the industry, drilling rig procurement and management, and training and resource development programmes to further develop the expertise of IOSCO personnel.

MPC is pleased to confirm that it has appointed London-based investment bank, JPMorgan Cazenove, as its financial adviser and placement agent in connection ith a major equity fundraising to support MPC's contribution to the joint venture's rilling operations.

Comenting on the announcement:
Foreign Secretary David Miliband said:

"I welcome the signing of the Joint Venture between Mesopotamia Petroleum ompany and the Iraqi Drilling company which was agreed today, the first such joint enture between a UK company and the Ministry of oil.

“This is an important signal of the long-term commitment the UK has to Iraq in terms f trade, commerce and economic co-operation. It is also an important message to British business that Iraq is open for business."

His Excellency Dr. Hussein Al Shahristani, Iraq’s Minister of Oil, said:
“I am very pleased to see a new company established in Iraq between the Iraqi Drilling Company and Mesopotamia Petroleum Company, and look forward to seeing it actively working on the ground in the very near future. This new Company can play a significant role in increasing Iraq’s oil production by rilling wells that are needed to develop Iraq’s oil fields.”

Idriss Al-Yassiri, Director General of IDC, said:
“IDC and its management and administration are happy to have this joint venture igned, and our work starts from today. Our business plan is to follow as a roadmap. This Company (IOSCO) has great potential inside and outside of the country of Iraq. Both sides are committed to making it successful, and all the circumstances for uccess are in place.”

Steve Remp, Executive Chairman of MPC, added:
“IOSCO is a much needed venture which will make an early contribution to Iraq’s oal of increasing oil production. It will combine Iraqi talent with the latest in nternationally proven drilling equipment, techniques and project management skills. Our longer term ambition for IOSCO is to see it emerge as a partner with Western oilconsortia in future field development projects.”


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