Iraq plans to set a new law to give foreign companies the right to exploit Iraqi oil reserves, reported The Independent.
According to the British newspaper, the law would give oil companies like BP, Shell and Exxon Mobil 30-year contracts to have access to Iraqi crude oil.
Agreements with foreign companies will be in the format of production-sharing agreements (PSAs), under which the state keeps legal ownership of its oil, but gives a share of the profits to companies that invest in infrastructure and in operating the wells, pipelines and refineries.
The implementation of such a law would be the first large-scale operation of foreign interests in Iraqi territories since the nationalization of oil industry in 1972, The Independent said. Besides, the introduction of PSAs would also be a first in the Middle East.
In terms of oil reserves, Iraq is ranked the third largest country in the world, behind Saudi Arabia and Iran, which both tightly control their industries through state-owned companies. Iraqi oil reserves are estimated at 115 billion barrels.
Since the US-led invasion of Iraq in March 2003, Iraqi production has fell down from 3.5 million barrels per day to two million at the present time.
(Al-Ahram, Kuwait Times & Turkish Press)