Monday, July 19, 2010

Kuwait gives initial nod for oil border post- Iraq

* Special border post just for oil companies

* Relations still acrimonious

BAGHDAD, July 19 (Reuters) - Kuwait has given initial approval to open a special border crossing with neighboring Iraq for international oil firms working there, an Iraqi oil official said on Monday.

"There is kind of initial approval from Kuwait's side," Abdul-Mahdy al-Ameedi, director of the Oil Ministry's licensing office, told Reuters on the sidelines of a meeting between oil executives and the Oil Ministry in Baghdad.

"This information we got from the contracting companies who said they talked with the Kuwaiti government, and that there is an initial approval to use the road that is close to Safwan and passes through Rumaila oilfield."

Several oilfields straddle the border between the two countries, including the Rumaila and Safwan fields.

The new border point would facilitate the inflow of equipment for oil companies that secured contracts to develop Iraq's oilfields, Ameedi said, adding that Iraq's Ministry of Foreign Affairs is also due to start official talks with Kuwait.

Iraq awarded a series of massive oilfield development contracts last year to majors such as Royal Dutch Shell (RDSa.L: Quote) and BP (BP.L: Quote) that could quadruple its output capacity to 12 million barrels per day within seven years.

As the projects get off the ground, inadequate dock space at Umm Qasr, the country's main port, bureaucratic impediments to securing visas, customs clearance, and corruption have become top complaints of oil executives.

In June, the head of state-run South Oil Co. said the proposal to open the special border post was being studied by Iraq's oil, finance and interior ministries but also needed the approval of the Kuwaiti government.

Relations with Kuwait remain frosty two decades after Saddam Hussein's invasion of Iraq's small neighbor.

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