TOKYO, June 26, (RTRS): A group of Japanese companies led by refiner Nippon Oil Corp is in the final stage of talks to win a $10 billion development contract for Iraq’s huge Nassiriya oilfield, a Japanese newspaper reported on Friday, the biggest foreign oil deal since the fall of Saddam.
Nippon Oil together with top oil explorer Inpex Corp and plant engineering firm JGC Corp had been vying with Italy’s Eni and Spain’s Repsol in the race for the engineering, procurement and construction contract, but industry sources had said Repsol was no longer in the running.
Iraq’s Oil Minister Hussain al-Shahristani said on Thursday that the Oil Ministry has selected a company to develop Nassiriya and has sent its choice to the cabinet for approval. He had declined to identify the company.  By 0218 GMT, shares in Nippon Oil climbed 4.2 percent, Inpex rose 1.9 percent and JGC gained 2.3 percent.

The Yomiuri newspaper, which did not cite sources, said an agreement could be reached as early as next month.
The EPC deal comes just ahead of next week’s unrelated tender for service contracts in six already producing oilfields and two undeveloped gas fields, the first open contest since the U.S. invasion for foreign companies to gain direct access to acreage in a country that holds the world’s third-largest oil reserves. Nippon Oil and Inpex said no decision has been made. A JGC spokesman declined comment.
The paper said oil output would be 150,000 barrels per day (bpd) for two years after the drilling begins and is targetted to increase to 600,000 bpd after that, equivalent to about 15 percent of crude imports by the world’s No. 3 oil consumer.
Officials have said in the past that it could produce 100,000 bpd within 18 months, while ENI estimated it might eventually pump up to 1 million bpd.

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DUBAI: The secretive world of Middle East oil deals will be thrown open in Baghdad next week when a contract auction is broadcast live, shining a spotlight on big oil dealmakers that prefer to stay behind the scenes.
“This is shaping up to be unlike anything I have ever been involved in,” said one senior executive for a major western oil company. “It is quite unique and will be some theatre. I don’t think any of us really know how this is going to work out.”
Bids for contracts for six of Iraq’s largest oilfields and two untapped gas fields will be opened in front of the cameras and the world’s media on June 29-30 in Baghdad. The bids will be compared and contracts awarded there and then.
After the first contract is awarded, competing firms would have a chance to go back and revise the terms of their next bid.
That is where the process could come to resemble a live TV game show.
“Firms are going to have to break alliances and broker new ones there and then, bid by bid, depending on what they win or lose,” said another oil executive working on the bidding process.
“They will also have to change bids under time pressure. That could become a bit unseemly if it happens in front of the cameras.”

BAGHDAD: The prime minister of Iraq’s largely autonomous Kurdistan region condemned on Friday plans by the Oil Ministry to auction six fields in a June 29-30 tender for service contracts, saying they violated the constitution.
A row between Kurds and the central government in Baghdad over control of Iraq’s oil reserves, the world’s third biggest, often sees them refusing to recognise each other’s dealings with foreign firms.
The dispute is part of a wider struggle over power and land that analysts say is the greatest long-term threat to Iraq’s stability as the United States plans to withdraw combat forces from Iraq by the end of August 2010.
Oil Minister Hussein Shahristani plans to announce the results of a first bidding round to international companies seeking a stake in the country’s reserves over the last two days of this month. Two gas fields are also on offer.
“This auction is a violation of Iraq’s federal constitution ... the proposed Oil Ministry contracts are not in the best interest of the Iraqi people,” Prime Minister Nechirvan Barzani wrote on the Kurdish Regional Government (KRG) website.
Two of the oil fields, Kirkuk and Bai Hassan, are in territory that is disputed between Baghdad and Kurdistan. The Kurds say the Oil Ministry has no right to tender these fields until that dispute is resolved.