Royal Dutch Shell PLC on Tuesday welcomed the Iraqi Cabinet approval of an initial gas agreement that paves the way to establish a joint venture with the Oil Ministry to invest natural gas in southern Iraq.
"We are delighted with the government's decision and look forward to signing the agreement in the near future," said Adam Newton, the London-based Shell spokesman.
In an e-mail response to The Associated Press, Newton said the joint venture calls for capturing and exploiting flared associated gas for domestic use and exports in the southern province of Basra.
He didn't identify the targeted oil fields nor release more details about the proposed agreement. But he said the Anglo-Dutch giant expected to complete the deal "within approximately one month."
On Sunday, the Iraqi Cabinet approved the tentative agreement following nearly eight months of discussions between Iraqi oil officials and Shell.
The state-run South Oil Co. will control 51 percent of the venture, while Shell will hold the remaining 49 percent, according to the Oil Ministry spokesman Assem Jihad.
The five-year agreement will be valued up to US$4 billion and is designed to gather at least 500-600 million cubic feet of flared gas per day from the southern fields, Jihad added.
