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Total nears Iraqi oil service contract

Speaking at the World Petroleum Congress, Total CEO Christophe de Margerie said the French oil major was close to signing a service contract in Iraq, though he didn't expect to make major investments in the country this year.

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French oil major Total is on the verge of signing a service contract in Iraq but does not expect to make major investments in the country this year, the firm's president said Tuesday.

Christophe de Margerie told a news conference at the World Petroleum Congress in Madrid that Total was negotiating a technical service contract together with Chevron to help develop the West Qurna oil fields in Iraq, which is home to the world's third-largest oil reserves.

"We are on the verge of signing a service agreement contract," he said. "We hope to sign a contract in the days, weeks to come. There are not many details to iron out.

"These are just transitory contracts. That is what we can do today because of the security problem. 2009 is probably too short a time frame to carry out major investments," he added.

Iraq is producing 2.5 million barrels of oil per day, which is short of its potential to put out six million barrels per day, Margerie said.

"When will it produce this amount? Don't ask because I don't have the answer," he said, adding the International Energy Agency's forecasts for Iraqi oil production had been consistently wrong.

Iraqi Oil Minister Hussein al-Shahristani said Monday his government was still negotiating with Total, Chevron, Shell, BP and a consortium of other smaller oil companies to develop six oil blocks and two gas fields.

"We did not finalise any agreement with them because they refused to offer consultancy based on fees as they wanted a share of the oil," he told a news conference.

Exxon cheif executive Rex Tillerson meanwhile told the gathering in Madrid he was optimistic of reaching a deal with the Iraqi government.

"I am very hopeful for Iraq. What role we may play today and in the future is entirely up to them," he said at a joint news conference with Margerie.

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