Iraq-Shell Gas Deal Likely To Be Delayed

SINAN SALAHEDIN

BAGHDAD (AP) — A final deal between Iraq and Royal Dutch Shell PLC to tap natural gas in southern Iraq is likely to be delayed until after January's national elections, a senior Iraqi oil official said on Saturday.

A preliminary deal was signed last September to establish a long-term and multibillion-dollar joint venture within a year to gather, process and market associated natural gas in oil-rich Basra province. Fifty-one percent of the joint venture would go to Iraq, 44 percent to Shell and 5 percent to Japan's Mitsubishi Corp.

Deputy Oil Minister Ahmed al-Shamaa said the focus on campaigning had complicated efforts to reach agreement, but he expects a final deal from Iraq's next government.

"The current political atmosphere is the one factor that determines more than anything else," he said.

The deal has drawn criticism from parliament's oil and gas committee, which says the Oil Ministry's selection of partners on a no-bid basis lacked transparency. The committee's lawmakers also say the deal will allow Shell to monopolize natural gas resources and influence prices.