Iraq will invite international companies to invest more than $2.5 billion in building a 150,000 barrel per day (bpd) oil refinery in the southern province of Maysan, a senior local official said on Sunday.
“We will ask international companies specialized in constructing and running refineries to build a major refinery near the Bazargan oil field,” Ali Warid, chairman of the local government’s Maysan Investment Office, told Reuters.
Warid added that American firm Shaw Stone & Webster, a subsidiary of Shaw Group Inc, won a $150 million contract last year to provide diagrams for the refinery and that it was expected to finish them soon.
In 2007, Iraqi parliament approved a law that opens the way for foreign firms to build and operate domestic refineries. Iraq has said it plans to boost refining capacity by 840,000 bpd as part of a $50 billion plan to overhaul the energy industry and boost production.
As violence begins to fall in Iraq almost six years after the US-led invasion, Iraq has begun to speed up efforts to revive its investment-starved oil sector, including boosting its refining capacity. On Monday, Iraq’s Basra refinery said three small Czech firms had been picked to revamp installations there.
The country has only this year reached a stage where it is refining enough gasoline for its own domestic transport purposes, despite sitting on the world’s third largest reserves.
For years since the 2003 invasion, it was forced to buy imported fuel to plug the gap. Iraq produces 2.4 million barrels of crude oil per day. The government will soon invite foreign companies to bid on a more than $1 billion contract to build and install a fluid catalytic cracker (FCC) at the biggest refinery, Baiji, in the north, which has a nominal capacity of 320,000 bpd.
On Wednesday, The Oil Ministry said it had issued a tender to foreign oil companies to drill 30 wells in three oilfields in Maysan, one of which has in excess of 5 billion barrels. (Reuters)