Shell, Europe’s biggest oil and gas company, is likely to face long delays in bringing a $17 billion gas deal with Iraq into operation as it tackles infrastructure, export constraints and sufficient access to gas from oilfields run by industry rivals.
Iraq’s state-run South Gas, or SGC, in July, in what was hailed as a breakthrough, initialled a final draft agreement with Royal Dutch Shell and Japan’s Mitsubishi for a deal to capture associated gas flared at three major southern oilfields.
Iraq is unlikely to shelve the deal now after talks have advanced, but Shell must navigate opposition from other oil companies and Iraqi officials, who wanted the joint venture to go through a public tender like other oil contracts. The deal still requires the approval of the Iraqi cabinet.
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