Iraq says talks continuing with Saudi companies, including Aramco, to develop gasfield

Project aims to boost production to 400 million cubic feet per day from major Akkas field near Syrian border

Saudi Aramco will develop the gasfield near Iraq's border with Syria. Reuters

Iraq is in discussions with Saudi companies, including Aramco, to invest in its oil and gas sector but a final agreement has not yet been reached, the Iraqi Oil Ministry said on Thursday.

Earlier, Iraq's Oil Minister announced in a statement that the ministry reached an agreement with Aramco to develop a major gasfield near the Syrian border.

Hayan Abdel Ghani announced the deal during a Saudi-Iraqi Co-ordination Council meeting in Jeddah.

But late on Thursday, the ministry issued a clarification, saying Aramco is among other Saudi companies invited to develop Akkas gasfield.

"Aramco is studying the co-operation mechanisms in this regard," the statement said.

"The Ministry will announce the terms and the mechanisms in the event a final agreement is reached.

"The Ministry hopes to reach a deal."

The aim is to boost production to 400 million cubic feet per day, Mr Abdel Ghani said in the earlier statement.

The field in the Anbar province was awarded to South Korea's state-run Korea Gas in 2010.

Kogas signed a deal to develop it in 2011, but withdrew when the field was captured by ISIS and then retaken by Baghdad in late 2017.

The field is believed to have reserves of 5.6 trillion cubic feet of gas, the Iraqi Oil Ministry said.

Mr Abdel Ghani said there was also an initial agreement with Saudi Arabia to invest in the Nebras project in southern Iraq.

He said it was "one of the most promising strategic projects in the petrochemical industries in Iraq and the region".

Meanwhile, on Thursday, Saudi sovereign wealth fund PIF announced a new unit to invest in industries across Iraq, with a capital of $3 billion and headquarters in Saudi Arabia, Reuters reported.

The Saudi-Iraqi Investment Company will invest in infrastructure, mining, agriculture, real estate development and financial services, among other areas, acting chief executive Muteb Alshathri said at the meeting in Jeddah.

The company is one of six regional investment vehicles the Saudi fund has established in Iraq, Jordan, Bahrain, Sudan, Oman and Egypt, aligning with its strategy to seek new opportunities in the Mena region.

The companies will focus on investments of up to $24 billion in sectors including infrastructure, real estate, mining, health care, food and agriculture, manufacturing and technology, the PIF said in October.

The PIF last year set up the Saudi Egyptian Investment Company, which took minority stakes worth $1.3 billion in four listed Egyptian companies in August.

The PIF, which is Saudi Crown Prince Mohammed bin Salman's chosen vehicle to drive an ambitious economic agenda to diversify the kingdom's economy, manages about $620 billion in assets and aims to grow that to more than $1 trillion by 2025.

Relations between Iraq and Saudi Arabia have warmed in recent years.

The kingdom severed ties with Iraq after Saddam Hussein's forces invaded Kuwait in 1990, but Riyadh and Baghdad began to repair relations in 2016.

Saudi Arabia reopened its embassy in Iraq, while the two countries set up a co-ordination council to upgrade ties.

They have since signed a series of agreements relating to politics, security and commerce, leading to the opening of a major border crossing.

Baghdad and Riyadh have since discussed partnerships involving Aramco to explore and develop natural gas reserves from new fields in Iraq's western desert.

Talks were also held with Saudi Arabia's Acwa Power to build water desalination plants and solar energy stations.

Saudi Arabia is not the only Gulf country to strengthen ties with Iraq.

In October 2021, the UAE signed a deal with Iraq to promote and protect mutual investments as Emirati companies sought to increase their presence in sectors including clean energy and logistics.

That month, clean energy company Masdar signed a deal with Iraq’s Ministry of Electricity and National Investment Commission to build five power stations in Iraq.

In September 2021, Abu Dhabi Ports Group entered into a preliminary agreement with the General Company for Ports of Iraq to explore investment opportunities and strengthen co-operation in the transport and maritime sectors.