The Iraqi government said it is setting up a new oil company in the south-eastern province of Maysan with the goal of more than tripling oil production in the region in the next five years.
The new outfit, Maysan Oil Company, will be split from the Southern Oil Company and established as a separate state-run company, a government statement, released late on Friday, said.
Together with the existing Northern Oil Company, Iraq will have three state-run oil players.
Oil Minister Hussain Shahristani said this week that each Iraqi province producing at least 100,000 barrels per day would get its own state-run oil company to focus on developing oilfields there.
The move is designed to expand oil activities in Maysan, a large, oil-rich but poor province bordering Iran, and to achieve the best use of the province’s oilfields, a Reuters report quoted the statement as saying.
Total oil output from Maysan province is between 100,000 and 110,000 bpd, the statement said.
“One of the targets of this company is to increase oil production in this province in the coming five years to reach 360,000 bpd,” it said.
Maysan province, which has six producing oilfields and five not yet in production, had been “neglected and marginalised for decades”, the statement added.
The new company will have the authority to coordinate with international companies to develop the province’s fields with the aim of increasing their capacity, it said.
The new company’s functions will include oil and gas production and exports through Basra. It will also provide Maysan refinery with oil and supply oil and gas to power stations, the statement said.
The new company will have capital of 9.5 billion Iraqi dinars ($8 million).
Iraqi security forces this month launched an offensive against Shi’ite militias in Maysan, reputed to be a weapons-smuggling centre.
Iraq’s Oil Ministry said this week it had finished negotiations with major foreign players on six short-term oil service contracts and hoped to sign the deals in the next month.
The deals are aimed at lifting output at Iraq’s largest producing fields by a combined 500,000 bpd.
Officials also told the news wires that Shahristani will today announce which producing fields will be open for long-term development contracts.
Shahristani told Reuters on June 1 that Iraqi oilfields were pumping more than 2.5 million bpd, the highest since the 2003 US-led invasion. Iraq would produce up to 2.9 million bpd by the end of 2008, he said.