Iraq Signs Oil Contracts with India, Holland

Despite a spate of bad luck awarding oil contracts over the past several weeks, Iraq bestowed nearly $300 million worth of contracts this week to Indian and Dutch firms. The firms will be setting up factories to manufacture oil and gas pipelines to help strengthen Iraq’s infrastructure for its petroleum industry.
 

 

 

 


According to Khalaf al-Badran, chairman of the Investment Commission of Basra, Jindal Saw Ltd., an Indian steel company, won a $198 million, 25-year contract for the construction and operation of a factory in Al-Argeli. This factory will manufacture pipelines that will eventually be used to transport Iraq’s collection of petroleum reserves.

The second contract, worth $86 million and for a period of 35 years, was awarded to an Iraqi subsidiary of the Danish construction company Phoenix International. Phoenix will be building a pipeline factory in Umm Qasr, and those pipes will be used for the transport of oil, natural gas, and water.

Badran said of the contracts, “We have giant oil projects moving ahead in the province and such a project should cut expenses for purchasing oil pipelines for Iraq.”

Both companies were provided with 10-year gas exemptions as part of their contracts.

The fortification of Iraq’s petroleum industry is vital for its future, as the country holds the world’s fourth-largest oil reserves, and income from the industry makes up 95 percent of the government’s revenues. Iraq recently announced a production goal of 8 to 8.5 million barrels per day by 2017.
 

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