Tokyo (Platts)--25Jan2011/313 am EST/813 GMT

Iraq Deputy Oil Minister Ahmed al-Shamma said Tuesday his country was open to one-to-one negotiations for a deal to both develop the Nassiriyah oil field and build a 300,000 b/d refinery in the region. "There is a good chance of negotiating a deal like that," Shamma told reporters in Tokyo. "It is a possibility that is accepted by most of my colleagues at the ministry," Shamma added, in reference to a deal that would combine both the downstream and upstream projects.

Shamma added a "big part" of Nassiriyah's 300,000 b/d refining capacity, which would be fully supplied by the Nassiriyah oil field, would be made available for export. Earlier this month Iraq's Deputy Prime Minister for Energy Hussein al-Shahristani, who is also the country's former oil minister, said the oil ministry planned to issue a tender for development of the Nassiriyah oil field this year.

Shahristani's comments followed previous negotiations between Iraq and a Japanese consortium about a possible engineering, construction and procurement contract for the field that ended last year without a deal.

It was not immediately clear whether Baghdad's next tender would be limited to upstream development of Nassiriyah or whether it would also include building an oil refinery in the province, as previously envisaged by Iraq.

With regards to when the tender for Nassiriyah would be announced, Shamma said the "timing had not been decided on that," adding this was partly due to Iraq giving priority to licensing rounds for gas and exploration projects.

He also said Japanese consortiums interested in negotiating for the project would have a good chance of securing a deal for Nassiriyah because of previous work they has done in the country. The Nassiriyah field was not included in either of the two international bidding rounds launched last year by the oil ministry, with Iraq inviting Nippon Oil to bid on a separate EPC contract to develop the field.

The Nassiriyah EPC contract was designed to raise output to 100,000 b/d within 18 months of the contract being signed. Production was set to rise to 150,000 b/d and possibly to 200,000 b/d within two years of the contract coming into effect.

--Takeo Kumagai, takeo_kumagai@platts.com --Thomas Hogue, thomas_hogue@platts.com

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