US firm gets Iraq deals

Iraq's oil ministry has awarded two contracts to a US engineering and construction firm for preliminary work on new oil refining projects. Shaw Group, based in Louisiana, has signed two contracts to provide feasibility studies and front-end engineering and design for proposed refineries near the Iraqi cities of Missan and Kirkuk. The company did not disclose the value of the contracts, but said they represented Shaw's first significant projects in Iraq.

The proposed refineries are near major producing oilfields from which Baghdad is attempting to boost output. If built, each would have a processing capacity of 150,000 barrels per day (bpd). Despite holding the world's third-largest crude oil reserves, Iraq cannot meet its domestic demand for petroleum products, such as petrol and diesel, from its existing refineries. Most date from the 1970s, are not in good repair and produce mainly heavy fuel oil instead of the lighter products that are in especially short supply.

To narrow the gap, Iraq has turned to its neighbour and former adversary, Iran. The two countries are in talks over a plan for Iran to import up to 200,000 bpd of Iraqi crude, which it would process at a refinery in its south-western Khuzestan province. In return, Iran would supply Iraq with 3 million tonnes per day of refined products. [e-mail]