Exclusive: Big oil companies may have to give up Iraq gas

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http://www.reuters.com/article/2011/08/29/us-iraq-gas-exclusive-idUSTRE77S1TO20110829

(Reuters) - Many of the world's biggest energy companies may have to surrender most of the gas from Iraq's vast southern oilfields to a processing and export project led by Shell, a final draft contract between Baghdad and Europe's biggest company, obtained by Reuters, shows.

Oil giants including Royal Dutch Shell (RDSa.L), BP (BP.L), U.S.-based Exxon (XOM.N), China's CNPC, and Italy's Eni (ENI.MI) signed technical service contracts to develop three oilfields in southern Iraq in 2009-2010.

But the oil deals to develop the Zubair, Rumaila and West Qurna 1 fields near Basra oblige the big oil contractors to surrender the gas they do not use for reinjection or power generation to Iraq's state-run South Gas Co (SGC).

Under the $17-billion gas deal to be ratified by the Iraqi cabinet, Baghdad has pledged to do what it takes to ensure these fields supply the Shell-led Basra Gas Company (BGC) joint venture with all the raw gas and natural gas liquids (LNG) it needs, including for an LNG export plant.