Iraq   Economy

Britannica Online

The manufacturing sector developed rapidly after the mid-1970s, when government policy shifted toward heavy industrialization and import substitution. Iraq's program received assistance from many countries, particularly from the former Soviet Union. The state generally has controlled all heavy manufacturing, the oil sector, power production, and the infrastructure, although private investment in manufacturing was at times encouraged. Until 1980 most heavy manufacturing was greatly subsidized and made little economic sense, but it brought prestige for the Ba'th regime and later, during the Iran-Iraq War, served as a basis for the country's massive military buildup. Petrochemical and iron and steel plants were built at Khawr al-Zubayr, and petrochemical production and oil refining were greatly expanded both at Al-Basrah and at Al-Musayyib, 40 miles (65 km) south of Baghdad, which was designated as the site of an enormous integrated industrial complex. In addition, a wide range of industrial activities were started up, some of which were boosted by the Iran-Iraq War, notably aluminum smelting and the production of tractors, electrical goods, telephone cables, and tires. Petrochemical products for export also were expanded and diversified to include liquefied natural gas, bitumen, detergents, and a range of fertilizers.

The combined results of the Iran-Iraq War, both Persian Gulf wars, and, most of all, the UN embargo eroded Iraq's manufacturing capacity. Within its first two years, the embargo had cut manufacturing?which was already well below its highs of the early 1980s?by more than half. After 1997, however, there was an increase in manufacturing output, in both the public and the private sectors, as replacement parts and government credit became available. By the end of the decade, large numbers of products long unavailable to consumers were once again on the market, and almost all the factories that were operating before the imposition of the embargo had resumed production, albeit at somewhat lower levels.



イラクの石油産業 Platts Guide to Iraq's Oil Industry

proven reserves of 112-bil bbl and probable reserves of 214-bil bbl, Iraq has the second largest crude reserves in the world after Saudi Arabia. The infrastructure of the country's oil industry is however in a lamentable state after suffering badly in the 1991 Gulf War.

More than a decade of UN sanctions have taken their toll on Iraq's oil reservoirs, which contain the world's second biggest oil reserves after Saudi Arabia.

Maintaining oil exports to feed its 23-mil people has presented Iraq with a major challenge as oil wells, particularly in the northern Kirkuk oil producing area, have suffered in the absence of badly needed spare parts. Production from the giant Kirkuk oilfield, discovered in 1927 and containing 10-bil in reserves and, from Rumaila in the south is in decline as the fields have matured, making it vital for Iraq to revisit idle oilfields and explore in the Western desert.

Iraq has put its proven oil reserves at 112-bil bbls, mostly in southern Iraq, but senior deputy oil minister Taha Hmud said in an interview in Baghdad May 23 that proven and probable oil reserves could top 300-bil bbl if all unexplored acreage was drilled.

Reserves could top 300-bil barrels
But Iraq has been unable to expand its exploration program in the past 20 years, first because of the 1980-88 Iran-Iraq war and later because of UN sanctions in place since 1990 after its invasion of Kuwait. "The figure we reached and which is widely known, is that we could discover 214-bil bbl of oil in addition to the present proven reserve. We are sure of this figure as all available indications and scientific standards say. This means that we will exceed the 300-bil bbl when all Iraq's regions are explored," Hmud said.

But with recovery rates low -- around 15-20% of oil in place -- and funding limited despite the release by the UN of additional funds for oil spare parts -- Iraq does not have modern recovery techniques that would allow it to raise production without damaging its reservoirs.

Yet it has no choice but to keep oil exports going under the UN's humanitarian oil-for-food program, which allows Baghdad to sell oil under UN supervision to buy food and medicines. Current exports are running at around 2.2-mil b/d, according to Iraqi officials since Iraq resumed oil sales after a one-month stoppage to punish the US for its support of Israel. Despite the sanctions, the US is the biggest single market for Iraqi crude oil through indirect sales by traders who buy Iraqi crude oil and sell it on.

Production cannot be sustained
The latest available report by experts from oil services company Saybolt International submitted to the UN in March 2000 said a production level of 3-mil b/d of crude oil was achieved without the technical resources to apply "good oil field practises."

The report said that without prompt action, production would continue to decline.

"The Iraqi oil industry continues to adopt high-risk solutions in order to balance the production quantity/oil price equation against the necessity to export crude oil, to produce gas for domestic use and to refine products for transportation and power generation.

Iraqi deputy oil minister Saddam Hassan, formerly head of the crude oil marketing department SOMO, told a conference in Cairo recently that Iraq's oil industry had been able to rise above the difficulties caused by war damage and the shortage of spare parts and modern technology.

Iraq has succeeded in raising its oil production from 1.5-mil b/d in 1997 to around 3-mil b/d in the last two years. Energy consumption had risen to around 32-mil tonnes of oil equivalent from 26-mil tonnes of oil equivalent in 1997.

Iraq has plans to raise its oil production from around 3-mil b/d currently to 6-mil b/d by 2010. Saybolt suggested in its report that Iraq needed to adopt horizontal drilling techniques, 3D seismic and reservoir simulation to raise recovery rates to between 35 and 50%. It also suggested that to offset current declines in production capacity in the longer term, new projects to develop known reserves that remain unexploited should be included.

Saybolt said that a sharp increase in production without concurrent expenditure on spare parts and equipment had already damaged oil-containing rocks and pipeline systems.

Unofficial exports through Syria
This has not deterred Iraq from using a leaky old pipeline running from northern Iraq to the Syrian Mediterranean port of Banias to export some 200,000 b/d of crude oil outside of UN control. Iraq and Syria have denied this practice, which traders say started in 2001. Western diplomats say Iraq is also smuggling crude oil through the Persian Gulf on "rust bucket" vessels that do not meet international maritime standards while truckloads of smuggled fuel oil cross into Turkey with their contraband cargoes daily.

Iraq was producing 3.1-mil b/d of crude oil before its forces invaded Kuwait in August 1990, making it the second biggest oil exporter after Saudi Arabia within OPEC. Saudi Arabia made up the bulk of the shortage on oil markets when Iraqi oil disappeared from markets and prices shot up to $30/bbl.

Iraq is hoping to return to its pre-Gulf War production capacity and has invited Russian and Chinese oil companies to help develop its northern and southern oilfields, many of which have been mothballed or have suffered water damage.

But implementation of these contracts will have to wait until sanctions are lifted completely. The UN and Iraq are holding a new round of talks in Vienna in early July to try to reach agreement on the return of arms inspectors to Iraq to verify that Iraqi President Saddam Hussein no longer possesses weapons of mass destruction. This is a key condition to lifting sanctions.

Iraq, which also sits on 110-trillion cubic feet of natural gas, is also hoping to be a major gas exporter but negotiations with neighboring Turkey on building a gas pipeline have not reached a conclusion.

April 15, 2003 Financial Times

Iraq has the resources to become oil/chemical giant.

The oil and petrochemical situation in Iraq is discussed, in connection with the present war there. Oil production at 2 M barrels/day is 33% less than it was before 1991.

Iraq has one chemical site still operating, including a 130,000 tonnes/y cracker, and plants for 60,000 tonnes/y of low density polyethylene (LDPE) and 30,000 tonnes/y high density polyethylene (HDPE). All these plants were operating at 20-30% of capacity before the war.  立地Khor-al-Zubair

It is said that with suitable capital investment, Iraq could make more oil and chemicals than Saudi Arabia. European and British plant contractors and machinery producers are seeking work from post-war Iraq, although American aid is at present connected with companies in the USA.

In the Arabian Gulf, Iraq has three tanker terminals: at Mina al-Bakr, Khor al-Amaya, and Khor al-Zubair.

Mina al-Bakr is Iraq's largest oil terminal, with four 400,000-bbl/d capacity berths capable of handling very large crude carriers (VLCCs). The terminal has a capacity as high as 1.2 MMBD.

Khor al-Amaya terminal could load 600,000 bbl/d. Upon full completion of repairs, Iraq projects Khor al-Amaya's capacity will rise to 1.2 MMBD.

Khor al-Zubair Iraq's third terminal, is linked to the Umm Qasr port by a 30-mile long canal. While Khor al-Zubair generally handles dry goods, it has the capability to service small quantities of liquefied petroleum gas (LPG) and refined products. Like Umm Qasr, Khor al-Zubair is being outfitted with crude loading capabilities.

AllBusiness 2005/5/9

IRAQ - The Petrochemical Sector.

Before the 1991 war, Baghdad had impressive plans for its petrochemicals industry. Baathist officials in 1995 said that, after the sanctions, Iraq may become one of the world's largest exporters of petrochemicals.

One of the targets for allied bombing in January 1991 wa
s the 1.5m t/y petrochemical complex at Al-Musayyib, in the centre, which was intended to become an industrial zone matching those of Baiji to the north or Khor Al-Zubair to the south. Technical teams have managed to rehabilitate several of the damaged plants which now meet domestic requirements for a range of plastics. But, as with oil products, the quality has been questionable since most units were only partly restored. Iraq has two main petrochemical complexes, one at Khor Al-Zubair near Basra, called PC-1, and the other under construction at Musayib, 60 km south of Baghdad called PC-2. Both owned and run by the State Enterprise for Petrochemicals (SEP).

PC-1 -
Khor Al Zubair - was badly damaged in the previous war, by March 1991 leaving Iraq with no thermo-plastic building blocks. It resumed limited operations in February 1992. The complex was mothballed on its completion in 1980 because of the 1980-88 war with Iran. It went on stream in early 1989 to produce: 130,000 t/y of ethane-based ethylene; 110,000 t/y of ethylene dichloride; 60,000 t/y of LDPE; 30,000 t/y of HDPE; 66,000 t/y of vinyl chloride monomer (VCM); and 60,000 t/y of PVC.

PC-2 -
Musayib: Construction of this complex, in central Iraq, had been postponed since the early 1980s because of the war with Iran. Soon after Iran accepted the ceasefire in August 1988, SEP went ahead with the project. A UK unit of Bechtel was contracted as a technical consultant and did the initial studies. The complex was nearly complete as the 1991 war began. Allied bombing severely damaged its units. It was brought on stream partly in October 1992, with Iraqi engineers having done the designs. Its ethylene unit was to have a 250,000 t/y capacity compared to 420,000 t/y planned.
Musayib was being developed as an industrial centre, with West Qurna field to provide crude oil, fuel and gas feedstocks. Under pre-war plans, the first phase of PC-2 was to cost up to $2.5 bn and was due to come on stream in the second half of 1991. It was to have the following capacities:
250,000 t/y of ethylene, - 160,000 t/y of low-density polyethylene, - 55,000 t/y of ethylene glycol, - 20,000 t/y of ethylene oxide, - 100,000 t/y of polypropylene, - 70,000 t/y of butadiene, - 145,000 t/y of styrene monomer, - 80,000 t/y of polystyrene, - 80,000 t/y of styrene butadiene rubber (SBR) and polybutadiene rubber, - 60,000 t/y of MTBE, - 15,000 t/y of butene-1, - 15,000 t/y of acrylonitrile butadiene styrene (ABS), and - 5,000 of styrene acrylonitrile copolymer (SAC).

The complex was to have an aromatics plant with a nameplate capacity of more than 115,000 t/y of benzene, 20,000 t/y of toluene, plus a 100,000 t/y alkylation unit and a 30,000 t/y catalytic condensation (polymer gasoline) unit.

In 1989 PC-2 was taken over by the Technical Corps for Special Projects (Techcorps). It gave the main process contracts. Construction contracts for all but three units went to the following: Technip (France) for the polyethylene unit; Tecnimont (Italy) for the polypropylene unit; a Japanese partnership of Toyo Engineering (TEC) and Nichimen Corp. for the ABS, SAN and butadiene units; TPL (Italy) for the ethylene glycol, ethylene oxide, MTBE, alkylation and polymer gasoline units; CTIP (Italy) for the butene unit; and Snamprogetti (Italy) for the aromatics plant. The complex was to be equipped with advanced instrumentation and computerised control systems supplied by OAPEC's Bahrain-based Arab Engineering Systems & Control Co. under a $25m technical aid contract with Techcorps.

OGN 2003/11/24

Sector hope in Petchem plant launch

Hopes are high that private-sector investment will secure the future of Iraq's Khor al-Zubair petrochemicals plant.

Engineers at the
Khor al-Zubair petrochemicals plant, about 40 kilometres south of Basra, are on the brink of a major breakthrough. In late October, gas pressure at the plant reached levels high enough to restart production of chlorine for the first time since it was shut down just before the outbreak of war in March.

The facility, built in the late 1970s by a US/German team of Lummus and Thyssen Rheinstahl Technik, survived the war unscathed, unlike much of the neighbouring industrial infrastructure. Any plundering that did take place was mostly limited to instrumentation and minor equipment. 'We managed to secure the plant even before the British army arrived,' says deputy plant manager Majid al-Faydh.

The plant - modest in scale by Gulf standards-has design capacity of 130,000 tonnes a year (tpy) of ethylene and 90,000 tpy of low and high-density polyethylene. It also produces significant volumes of low-grade product for the local agricultural sector, such as polyvinyl chloride (PVC), polythene sheeting, caustic soda and sodium hydrochloride.

'We have finished drying the chlorine units and have partly rehabilitated some of our utilities, such as the RO {reverse osmosis} water plant, which we need for steam. I expect to restart production of chlorine any day at a rate of about 50 tonnes a day. When we get more gas we also plan to restart ethylene output,' says Al-Faydh.

The plant requires 80 million-85 million cubic feet a day of gas feedstock. Some of this is siphoned off to fuel the complex's four gas turbines, which have capacity to produce about 60 MW of power. Only one of the turbines is operating at present. The US' Bechtel, under its
US Agency for International Development (USAID) reconstruction contract, has brought in Dubai-based Masaood John Brown to repair the units, which it originally installed.

Improvements to the local grid have also assisted the plant's restart. Supplies of about 15 MW have just come on stream to add to the existing 10 MW produced by its one operable turbine. Once the plant's powerhouse has been folly restored, the plan is to put the surplus electricity back into Basra's domestic network.

So far, everything achieved at the plant has been done on a shoestring. The State Company for Petrochemical Industries (SCPI), which owns and operates the facility, has a minimal budget of about $1 million. Yet, it has managed to sustain the 3,800-strong workforce and bring the plant to the brink of restarting production with the bare minimum of help from the Coalition Provisional Authority or USAID.

However, the plant's long-term future may depend on attracting private investment.

日本経済新聞 2007/3/6

イラク新石油法 利権配分 交渉長期化も
 油田持たぬスンニ派 「草案は外資利する」
 シーア派・クルド系  権益維持へ制定急ぐ


Sep 2, 2007 REUTERS

Iraq considering $2 bln petrochemical plant

Iraq is considering building a $2 billion petrochemical plant and could begin talks with potential international investors in the project this year, the country's industry minister said on Sunday.

"We are considering a completely new facility in the central or northern parts of the country," Fawzi al-Hariri told agencies on the sidelines of a conference in Dubai.

The plant would have an annual capacity of 1 million tones of ethylene and derivatives, he said.

Hariri said on Wednesday that Royal Dutch Shell Plc and Dow Chemical Co were in talks with the government to renovate and expand a chemical plant in southern Iraq at a cost of up to $2.1 billion.

Oil majors are eager to gain access to Iraq's oil reserves, the third-largest in the world, although security concerns mean the companies are reluctant to put people on the ground.

Iraq, which produces most of its crude in the south of the country, pumped 2.07 million barrels per day last month, making it the Middle East's fifth-largest producer, according to a survey this month.

The Associated Press September 2, 2007

Iraqi government officials and energy experts presented detailed plans for exploiting the wartorn country's vast petroleum wealth but admitted that the absence of a law regulating the industry is a bigger obstacle than security to attracting foreign investment.

Government officials at the three-day "Iraq Oil, Gas, Petrochemicals and Electricity Summit" held in Dubai tempered their grandiose projects for exploiting the country's massive oil reserves by admitting that the vital, but contentious, law still needed to be passed.

"Security is not stopping investors coming to Iraq, (it is because) they have no laws to protect their investment," Ali al-Dabbagh, the Iraqi government spokesman, told the Associated Press at the start of the conference.

After months of acrimonious debate, a new draft oil law will be discussed in parliament in the coming weeks, which al-Dabbagh hoped would be adopted by the end of the month.

"The majority of politicians are aware that we cannot go on without it," he said. "The oil law is the future of Iraq."

Despite being some of the largest in the world, Iraq's oil reserves are also some of the least exploited with the worst infrastructure - something Iraq is hoping foreign investors can change.

Talks have been held with Shell, Texaco and Dow Chemical companies on possible investments in various proposed projects, said Fawzi al-Hariri, Iraq's Minister of Industry and Minerals. He said the Saudi Basic Industries Corporation has also expressed interest.

Al-Hariri hoped that the negotiations would be concluded by the end of the year.

He described a plan for a US$120 million (Euro87.56 million) upgrade of a Basra petrochemical plant, that could be developed further with another US$1 billion (Euro0.75 billion).

"We are also considering a second, completely new facility, maybe in the north or central region," he told Dow Jones Newswires at the conference, putting the cost at over US$2 billion (Euro1.5 billion).

He said that the plant's final location would depend on the security situation.

Even more than new projects, however, it is the country's creaking oil infrastructure that has to be fixed, preferably with foreign investment, said Thamir Ghadban, chairman of Iraq Oil Commission.

Several times over the last three decades, complete overhauls were planned only to be shelved as the country was wracked by devastating wars and then U.N. sanctions.

"We think Iraq needs to bring up the oil production, but it also needs to go into oil exploration," Ghadban said, adding that the government plans to "convert 25 to 30 percent of probable reserves into proven reserves. "

If it succeeds, Iraq could raise production to 6 million of barrels of oil a day, up from an average of around 2 million barrels.

"Four million with national efforts and additional two million in cooperation with foreign oil companies," Ghadban said.

The country's former oil minister, Ibrahim Bahr al-Olom, called for additional domestic involvement in the sector as well, stressing the need for a "balance between national and foreign investment."

"Iraqis deserve a better standard of living," al-Olom said. "The only way they will get it, is by developing oil and gas resources."

日本経済新聞 2008/7/1

イラク 8油田・ガス田、外資導入
13年に原油8割増産 日系4社など応札資格



Sep 01, 2008 (AsiaPulse via COMTEX)


Iraq has signed its first major oil deal with a foreign company since the fall of Saddam Hussein's regime, a spokesman for the Iraqi Oil Ministry said Saturday.
The contract with the
China National Petroleum Corporation could be worth up to US$3 billion and marks the first time in more than 35 years that Iraq has allowed a foreign oil company to do business inside its borders.
The deal allows the CNPC
to develop an oil field in southern Iraq's Wasit province for about 20 years, Oil Ministry spokesman Assim Jihad said.
Iraq's Cabinet must still approve the contract, but Jihad said that would happen soon and work could start within a few months.
The Chinese company will provide technical advisers, oil workers and equipment to develop
al-Ahdab oil field, providing fuel for al- Zubaidiya power plant in Wasit, southeast of Baghdad, bordering Iran, Jihad said.
Once development begins, the field is expected to start producing a preliminary amount of
25,000 barrels of oil a day and an estimated constant daily amount of 125,000 barrels after three years, he said. `
Iraq currently produces about 2.5 million barrels a day, 2 million of which are exported daily, Jihad said. That is close to its status before the US-led war that toppled Saddam in 2003, but below its levels prior to the Persian Gulf War in 1991.
Iraqi Oil Minister Hussein Shahrestani said in July that he is confident Iraq will be able to double its production in the next five years.
As it did with other international companies, the Saddam regime had a partnership contract with
CNPC signed at the end of the 1990s that entitled the company to share profits. The current contract, however, will be only a "service contract" under which CNPC is simply paid for its services, Jihad said.
He said Iraq has provided "security guarantees" for CNPC, as it would for any other foreign company that will work in Iraq's oil fields. Jihad called it a major and significant move for Iraq.
Iraq sparked a scramble for lucrative oil contracts in June, when Shahrestani opened bidding to 35 international companies for long-term contracts to redevelop six oil fields. The Oil Ministry continues to negotiate short-term, no-bid contracts with several US and European oil companies, including Exxon Mobil Corp., Royal Dutch Shell, Total SA, Chevron Corp. and BP.
Iraq has among the largest oil reserves in the world, with an estimated 115 billion barrels, tying Iran for the No. 2 status behind Saudi Arabia's 264 billion barrels, according to estimates from the Energy Information Administration.

2008/8/29 CNN

バグダッド南方の油田開発で合意、調印 イラクと中国国営企業

イラク石油省高官は28日、同国と中国がイラクの首都バグダッド南方にあるアハダブ油田開発の合意文書に27日調印したと述べた。同油田の開発で 両国は、2003年の米軍事作戦の開始前に合意、調印していたが、戦時の影響で、政府間の承認が出来ない状態となっていた。

米軍事作戦で崩壊した旧フセイン政権時代の石油開発計画が復活したのはこれが初めて。中国側の参加企業は、国営の中国石油天然ガス集団 (CNPC)。旧フセイン政権は、国連による経済制裁を受けていたが、CNPCとの契約を強行していた。ただ、事業開始は国連制裁の解除後となっていた。



日本経済新聞 2009/5/16

来月からクルド自治区の原油輸出 イラク政府、歳入減少で妥協

 Tawke油田はノルウェーのDNO International ASA が、Taq Taq 油田はカナダのAddax Petroleum などの企業連合が開発する。中央政府はこれまで国家収入の9割を占める原油は中央政府が一元管理するとの立場から「自治政府が外国石油会社と交わした契約は違法」(シャハリスタニ石油相)と輸出を認めてこなかった。


Iraq-Eni sign Zubair oil deal

Iraq's oil ministry on Monday signed an initial deal with a consortium led by Italy's Eni SpA to develop a prized southern oil field, an agreement representing a key step forward in the country's obstacle-strewn road to revamp its dilapidated oil sector.

Eni, the U.S.'s Occidental Petroleum Corp. and South Korea's KOGAS will develop the 4.1 billion barrel Zubair field, with an eye to boosting output from around 200,000 barrels per day to 1.1 million barrels a day within seven years.

Although the deal must still be approved by the Cabinet, Iraqi Oil Minister Hussain al-Shahristani, hailed it as a significant achievement at Monday's signing ceremony in Baghdad.

"Today, Iraq made a big leap on the way to develop its oil industry," said al-Shahristani of the deal, which comes a day before Iraq is to finalize an agreement with Britain's BP PLC to develop the nation's largest oil field. "We are happy with this progress and the achievement."

Shahristani also promised "more good news in the coming days that will "put Iraq on the international oil map."

The Eni-led consortium will receive
$2 per barrel of crude produced. That's less than half $4.80 per barrel they had bid in the licensing round in held in June in Baghdad. The 20-year contract could be extended by another five years.

Iraq's oil industry has been hampered by years of devastating wars, crippling sanctions and sabotage attacks by insurgents after the 2003 U.S.-led invasion, and continued violence has done little to allay international companies' concerns about working in the country.

The June licensing round in June -- the first such event in the country in over 30 years -- fizzled, with a deal struck on only one of the six oil and two gas fields on offer. Analysts attributed the lackluster showing to unrealistic demands set by Iraq, as well as low prices offered by the government at a time when security remains tenuous.

Further undercutting development efforts is an impasse over Iraq's oil law. The legislation, which would govern natural resources and regulate foreign investment, has been stalled in parliament since 2007. That has given international companies little incentive to rush back into a country with the world's third largest proven reserves of crude.

The signing of the Zubair deals come on the eve of the expected signing Tuesday of a
final deal with BP and its Chinese partner, CNPC, to develop the 17.8 billion barrel Rumaila oil field near the southern city of Basrah.

Rumaila, the Iraq's largest oil field, was the only deal struck in the June licensing round. It would also be the second major agreement reached by CNPC in Iraq after Saddam Hussein's regime was toppled in 2003. Last year,
CNPC signed a $3 billion deal to develop the al-Ahdab oil field in southern Iraq.

Daily production from Rumaila is at about 1 million barrels a day. BP's targeted production for the oil field is 2.85 million barrels a day within seven years.

The BP-CNPC consortium originally bid to receive $3.99 per barrel produced, but later slashed the offer to the $2 per barrel payment sought by the Iraqi Oil Ministry. The competing bid in June was from a consortium led by U.S. giant Exxon Mobil, which refused to amend its offer of $4.80 per barrel.

In the wake of the poor showing at the licensing round, al-Shahristani announced last month that Iraq was revisiting the bidding after three international oil consortiums revised their offers and accepted Iraq's terms for developing two oil fields in the south.

The Zubair field was one of those two fields, while the second is the 8.6 billion barrel West Qurna Stage 1.

Three other international oil consortiums are competing to develop that field after accepting Iraq's terms $1.9 per barrel that were offered in the bidding round.

One is led by Russia's Lukoil and ConocoPhilips, another by Exxon Mobil with Royal Dutch Shell and third is led by China's CNPC, al-Shahritsnai annoucned.

The Lukoil-led consortium's targeted production is 1.5 million barrels a day while the other consortium's targeted production is 2.1 million barrels a day. Lukoil consortium submitted an earlier bid of $6.49 per barrel and the Exxon Mobil-led consortium was asking for $4 per barrel.

The winner will be announced in the coming few days, al-Shahristani said.

Iraq is also planning a second bidding round on December 11-12.

Forty-five international oil companies are set to bid for 10 oil projects on offer.

Iraq's daily production ranges between 2.3 to 2.4 million barrels a day and exports nearly 2 million barrels a day.

The overall fall in oil prices since last year has forced the government to slash spending plans for this year from $79 billion to $58.6 billion. The oil sector represents about 65 percent of Iraq's gross domestic product and its revenues account for 95 percent of Iraq's earnings.