In a statement, the ministry said it signed the deal with Stroytransgaz, a Russian construction and engineering company for oil and gas, to explore parts of the mostly desert Anbar province in western Iraq where there is untapped oil and gas.
“The exploration bloc is one of the promising sites and studies and preliminary information point to the existence of oil reserves ranging between the equivalent of two to four billion barrels, of which gas comprises 60 to 70%,” Minister of Oil Thamer al-Ghadhban was quoted as saying by the ministry in the statement.
The minister added that the project would help economic development in the province by providing job opportunities and supporting the local private sector.
Asim Jihad, spokesman for the oil ministry, said the contract includes three stages consisting of exploration, development and production, and will cover a total area of 12,000 square kilometers.
The Russian company will have to build a residential compound in Anbar and develop the infrastructure and services of the province with an estimated value of $100 million. The contract has been sent to the ministerial council for energy for it to be eventually ratified by the Prime Minister’s Council of Ministers, also according to the statement.
Stroytransgaz was sanctioned by the US Department of the Treasury in 2014 in response to Russia’s military actions in Ukraine at the time. The Volga Group, which owns Stroytransgaz, provides financial, material and technological support to the Russian government, according to a Department of the Treasury press release.
After years of sanctions starting in 1990 due to the Iraqi invasion of Kuwait, Iraq’s oil industry was in tatters, and the US invasion of the country in 2003 made matters worse. The country has been rebuilding the critical sector, from which most of the revenue of the country stems, gradually.
Iraq, which exported a daily average of 3.6 million barrels of oil with a total revenue of $6.34 billion in August, aims to increase production to millions more, to at least six million barrels, in the coming years.
To that end, the country has started giving out contracts to major companies. It has also signed a deal worth $53 billion dollars over a 30-year long contract with ExxonMobil and PetroChina to develop two oil fields In Basrah.
