The Iraqi cabinet expected the total proceeds from developing the al-Ahdab oilfield in Wassit province to hit $ 55 billion for a period of 20 years, or 87% of the total revenues of $ 63 billion, according to a statement by the official spokesman for the Iraqi government on Wednesday.
"The presumptive investment cost to upgrade al-Ahdab oilfield in association with a Chinese company reached three billion dollars hile the operational cost was put at four dollars per one barrel before adding 15% tax duties over the contractors' profits," Ali al-Dabbagh said in the statement received by Aswat al-Iraq - Voices of Iraq - (VOI).
Al-Ahdab field, in the al-Ahrar district, (25 km) western Kut city, is one of the uninvested Iraqi oilfields that is, if deveoped, expected to hit 200,000 barrels per day (bpd) in capacity.
Discovered in the year 1979, the oilfield boasts a reserve of 225 million bpd.
The statement quoted Dabbagh as saying that "the 20-year-old service contract provides that the Chinese company shall construct all the surface installations necessary to extract oil and separate and treat gas as well as other reservoirs and facilities".
"In return, the Iraqi side will afford the costs these obligations over annual batches to guarantee fine performance," said Dabbagh.
The Iraqi government spokesman pointed out that the contract to develop al-Ahdab field envisages economic previliges for Iraq compared to the partnership agreement signed during the previous regime's time, as the Chinese company's profits from the total revenues of the project are 4% in the current contract compared to 8% in the previous contract, which saves a sum of $ 2.5 billion for Iraq provided that one barrel of oil is worth $ 100.
Wassit, 180 km south of Baghdad, is in the east of the country. Its name comes from the Arabic word meaning "middle," as it lies along the Tigris about midway between Baghdad and Basra.
Its major cities include the capital, al-Kut, and al-Hayy. Prior to 1976 it was known as Kut Province.(Voices of Iraq)