Britain’s Premier Oil PLC is teaming up with Russia’s Bashneft to develop Iraq’s oil block 12, an Iraqi oil official said on Sunday.

Last month Iraq awarded Bashneft rights to develop the field. Bashneft has now chosen Premier Oil as a partner, Abdul-Mahdy al-Ameedi, head of the oil ministry’s contracts and licensing directorate, told reporters.

Bashneft will hold 70 percent and Premier Oil 30 percent in the project, he said.

“If another partner entered, we would not object and we would welcome this on the condition that the partner is one of the qualified companies,” he added.

OPEC member Iraq holds the world’s fourth largest oil reserves and is expected to be a major source of future oil supplies.

In May, a group comprising Premier Oil, Bashneft and Petro Vietnam initially rejected a government offer to develop the block in Iraq’s fourth energy bidding round.

Baghdad has signed a series of contracts with foreign oil companies that target total oil production capacity of 12 million barrels per day (bpd) by 2017, up from about 3 million bpd. Most analysts see 6 million to 7 million bpd as a more realistic goal.

Source: Reuters