Japanese Companies Bid for Iraq Gas Development Project

Mitsubishi and nine other Japanese companies will join the gas development project in Iraq in collaboration with KBR, a subsidiary of Halliburton, the U.S. energy service company that is providing supplies to the U.S. military in Iraq.

U.K.’s Financial Times reported on Friday that the consortium, made up of giant Japanese companies, and KBR will bid for a project assigned by the Coalition Provisional Authority (CPA) to develop gas fields in western Iraq. KBR’s parent company, Halliburton, is an U.S. energy group once led by U.S. Vice President Dick Cheney.

The Japanese consortium is understood to have signed a memorandum of understanding with Thamir Ghadhban, the former chief executive of Iraq’s oil ministry, this July. The U.S. and Japan are eyeing gas fields in western Iraq, which are unexploited but could be worth billions of dollars. The gas produced from this field will likely be exported to Saudi Arabia and Jordan.

The U.S.-Japan consortium stands in a strong position to win the bidding for the Iraq gas development plan because during the two-day Madrid conference of reconstruction in Iraq, the Japanese government pledged to donate $5 billion over a five-year period from 2004 to 2008. Along with Mitsubishi, Japanese companies included in the consortium are Mitsui, Marubeni, Itochu, Tomen, Chiyoda, and others. According to the newspaper, Japanese companies are also considering a dozen other projects in Iraq and among these, include supplying equipment to a hydro power station in Mosul and providing hospital beds.

Rae-Jeong Park ecopark@donga.com