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Iraq signs initial deal to tap natural gas

Iraq signs initial deal to tap natural gas

July 12th, 2011 by SINAN SALAHEDDIN, Associated Press in News

BAGHDAD (AP) - An oil executive says Royal Dutch Shell PLC and Japan's Mitsubishi Corp. have signed an initial deal with Iraq to tap natural gas in the country's south.

Shell's Vice President for Middle East and North Africa Mousnir Bouaziz told The Associated Press on Tuesday that the deal was signed in Baghdad.

Bouaziz says it will be sent to the Iraqi Cabinet for final approval.

Iraqi officials, who had earlier said the deal is worth between $12 billion and $17 billion, were not immediately available for comment.

The joint venture is called Basra Gas Company. Iraq will hold 51 percent, Royal Dutch Shell 44 percent while Mitsubishi will hold a 5 percent stake.

Iraq has been trying to develop its gas reserves to address electricity demands as well as export needs.