Iraq has offered three oilfields to India on nomination basis: Moily

Union Petroleum and Natural gas Minister Veerappa Moily has said that Iraq has offered three discovered oilfields to India on nomination basis and agreed to renegotiate an oil block that has been pending since 2000.

Iraq, India's second-largest crude oil supplier after Saudi Arabia, offered to give state-owned Indian firms Kifil, West Kifil and Merjan discovered oil blocks in the Middle Furat oilfields on nomination basis, Moily told reporters here.

Moily, who returned from Baghdad after attending the Indo-Iraq Joint Commission Meeting, said the "fields are discovered and work can immediately start."

This is the first time in recent past that an oil-rich Gulf nation has offered fields on nomination basis.

Previously, Iraq and other Gulf states asked Indians to participate in an international competitive bidding to get the oilfields.

Iraq has also agreed to immediately renegotiate and conclude the contract for Block 8 with ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp, he said.

Block-8, located in the western desert in southern Iraq bordering Saudi Arabia and Kuwait, was awarded to OVL in November 2000 by the then Saddam Hussein government.

However, the government formed after the US invasion of the oil-rich country, sought re-negotiation of the contract which has been pending so far.

The post-Saddam Hussain regime had initially agreed to signing of a Production Sharing Contract (PSC), where OVL would have got ownership of the oil it produced from Block-8.

But the success of post-war licencing rounds, where global majors committed to develop oilfields for a small fee, has seen Baghdad change track and offer a service contract to OVL.

The Block 8 already has a discovery and is estimated to hold 645 million barrels of in-place reserves, of which 54 million are recoverable.

Officials said the contract for all the four blocks would be a service contract wherein OVL will be paid a fixed per barrel fee for its efforts in exploring and producing oil.

Moily said Iraq also agreed to consider investment in the upcoming 15 million tonne a year oil refinery of Indian Oil Corp (IOC) at Paradip in Orissa.

"The Iraqi side also expressed interest in the proposal of IOC for participation in a refinery project in Iraq," he said adding the OPEC producer committed to meeting the long term requirement of crude oil of India and was also open to consider more favourable commercial terms including extending the interest free credit period from 30 to 60 days.

Iraq supplied 24.04 million tons of crude oil in 2012-13.

"Possibilities for cooperation in the gas sector that could include import of LNG from Iraq, Indian participation in exploration as well as value addition through petrochemical projects and liquefaction terminals in Iraq were discussed," he said.