Statoil eyeing Iraq opportunities - report

Norwegian energy group is watching for opportunities to take part in developing Iraq's vast petroleum resources, but it will …

Norwegian energy group is watching for opportunities to take part in developing Iraq's vast petroleum resources, but it will not rush into the war-torn country, a top Statoil executive said.

In the Middle East, state-controlled Statoil is already development phase operator of Iran's big offshore South Pars gas project. It is also operates in Algeria, Angola and Nigeria.

"Since we are in the oil business, it is clear that the opportunities that are found in Iraq are interesting to follow up," Mr Peter Mellbye, Statoil's head of international exploration and production, said in an interview with the Norwegian daily Aftenposten.

Stavanger-based Statoil hosted a delegation from Iraq last spring to talk about the Iraqi oil and gas business, Mr Mellbye said. "The situation down there is such that it is not timely now (for Statoil to go into Iraq), but there is no reason not to pursue the opportunities that obviously will emerge."

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His remarks were more positive on the chances for Statoil to enter Iraq than earlier lukewarm statements from the company's top management.

"We do not know if it will take one, two or three years. But the signals from the Iraqis themselves are that they want a mixture of international participants and national companies," Mr Mellbye said.

"There is little to indicate that they will limit themselves to invite only a few big ones, or that the British and American companies will get a special advantage."

Unlike in neighbouring Iran, where Statoil has a so-called buy-back agreement securing it a certain return on its investment in South Pars, the Iraqis have shown more interest in production sharing agreements.

Mr Mellbye said that was welcome because such agreements offer greater incentive to increase production and benefit when prices are high.

Statoil gets only a small fraction of its total oil and gas production from its international activities, but the share is expected to grow as oil output begins tapering off on maturing Norwegian fields. Gas production is still growing sharply in Norway.