Royal Dutch Shell and Malaysia's Petronas have won the rights to develop one of the world's largest remaining untapped oilfields as Iraq staged its second auction of oil contracts since the 2003 US invasion.
The companies proposed a fee of just $1.39 per barrel and pledged to increase output from the supergiant Majnoon field to 1.8 million barrels per day, more than double what Iraq had expected. The fee was below what Iraq had sought.
French oil major Total, partnered with China's CNPC, also bid and was likely to have been disappointed at losing a field it sought to develop under Saddam Hussein. As some consolation, it had a stake in a CNPC-led consortium that won the rights to the smaller Halfaya oilfield.
Iraq is offering 10 oilfields over two days in a rare opportunity for oil firms, from Western majors to Chinese and Indian state-owned giants, to gain access to plentiful and cheap to pump Middle East oil reserves.
The deals have the potential to lift Iraqi oil output to levels which would rival that of top oil producers Saudi Arabia and Russia.
Emerging countries holding up demand - IEA
The International Energy Agency has said world oil demand will be slightly firmer than expected next year because emerging countries are leading the recovery while US consumption is 'sluggish'.
The IEA also said the global crisis had probably removed some demand permanently and energy-saving measures would also affect consumption in the years ahead.
But it raised its estimated price in real inflation-adjusted terms in 2014 to about $76 a barrel from $60 estimated in June.
The agency said it was holding its estimate for demand in the advanced OECD economies this year broadly unchanged.
Oil prices fell again this evening after the IEA report. US crude dropped 75 cents to $69.79 a barrel, while Brent shed 41 cents to $71.45.
Crude futures had risen earlier in the day as official data showed that Chinese industrial output expanded by 19.2% in November from a year ago.
