BP may hand control of Rumaila to CNPC

British supermajor may give Chinese counterpart majority shareholding

(Getty Images)
(Getty Images)

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Speculation is mounting that British supermajor BP is to allow it’s fellow consortium member, the China National Petroleum Corporation (CNPC), to take over as the majority stake-holder for the super giant Rumaila oilfield development contract in Iraq.

News agency Reuters reported that an unnamed source said that while BP wanted to remain part of the project it wanted to take a smaller stake.

The move is being seen as an indication that BP agreed to develop the field for too low a figure. The deal that was struck between the consortium and the Iraq Oil Ministry was for US$2 for every extra barrel produced from the field above minimum plateau production target set by Baghdad.

The BP-led consortium had initially requested $3.99 for every extra barrel produced over the minimum target while the rival consortium for Rumaila, headed by ExxonMobil, had asked for $4.50.

However, it is thought that CNPC can still develop the field and turn a decent profit due to it being able to use its own service teams and drive down costs.

"Terms that are bad for BP are not necessarily bad for Chinese companies. CNPC has never seen a better field than this one," a source is quoted by Reuters as saying.

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