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BP-Chinese consortium wins huge Iraqi oil deal

The Iraqi government announced on Saturday that it had awarded a BP/CNPC consortium a contract to develop a 17.8 billion barrel Rumaila field in southern Iraq. As the June offering for development rights was drawing to a close, there was an overwhelming feeling of disappointment over the tepid response from the potential bidders. As Iraq controls the world's third-largest known oil reserves, and crude exports are its lifeblood, it was expected that interest would be high. But the country is still seen as a very risky destination, with a toxic mix of violence, uncertain government and the prospect of US forces completely withdrawing by 2011. All in all, six oil and two gas fields were on offer, and the BP/CNPC one is the first to be awarded. Iraqis will own 25% of the project, with BP controlling 38% and the Chinese the remaining 37%. The second bidding round is scheduled for December and will have 10 oil projects on offer.

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