Iraq awards contract

Press, 22 September 1987, Page 37

Iraq awards contract

By

STEPHEN JUKES

NZPA-Reuter Bagdad

Iraq awarded a longawaited sUSlbillion ($1.62 billion) oil pipeline contract on Sunday to an international consortium led by Japan and Italy.

An official statement said the contract was signed by the Oil Minister, Issam Abdul-Rahim alChalabi, and a group of Japanese, Italian, French and South Korean companies. The pipeline across Saudi Arabia is expected to boost Iraq’s oil exports to more than three million barrels a day within two years.

Western diplomats in Bagdad said the deal was a severe blow to West German industries which had entered a rival bid.

It was also a slap in the face for the Foreign Minister, Hans-Dietrich Genscher, who soured Bonn’s relations with Bagdad in July by saying Iraq had started the Gulf War.

The 1000 km pipeline, to be finished in two years, will carry 1.15 million barrels of oil a day to the Saudi Arabian export terminal at Yanbu on the Red Sea. It will run parallel to an existing line already pumping 500,000 bpd of Iraqi crude.

Mr Chalabi described the project as one of the biggest of its type in Iraq. He said it would bring Iraq’s daily output of crude, now estimated at 2.1 million bpd, back to the pre-war level of over three million bpd. Iraq did not name the companies, but diplomats said two rival consortia which teamed up at the end of August had won the contract.

They grouped Japan’s Mitsubishi Heavy Industries, Italy’s Saipem, South Korea’s Hyundai Engineering and Construction Company, Snamprogetti and Siderexport of Italy, and Spie-Capag,