Iraq has restarted a bid to revive a much-delayed giant petrochemical project which it signed with the Royal Dutch Shell in 2012 but was blocked by internal hostilities and a rift over feedstock prices, the country’s Oil Minister was quoted on Monday as saying. 

Ihsan Abdul Jabbar said the contract would be submitted to the cabinet within a few weeks to discuss a solution to the rift so that Shell moves ahead with the Nibras project, which is located in the Southern oil hub of Basra. 

He told Iraq’s Shafaq News Agency that the rift was caused by different calculations for prices of crude and gas to be supplied to the petrochemical complex. 

“The main obstacle that has blocked this project was how to calculate feedstock prices and whether Iraq should sell it at a price that is different from market prices,” he said. 

“This obstacle has prompted the Industry Minister to delay approval of the project...the Oil Ministry will present its vision to the cabinet within a few weeks in order to find an adequate solution to this problem and start the project,” he added. 

Shell will control 49 percent of Nibras while the Iraqi Oil and Industry Ministries will own the remaining shares of the project, believed to be the world’s fourth largest petrochemical complex with a planned output capacity of 1.8 million tonnes per year. 

Officials have said the $11-billion project, which will turn the OPEC member Iraq into a major petrochemicals producer, will be completed within 5-6 years and will generate profits of around $90 billion during its 35-year operational period. 

(Writing by Nadim Kawach; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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