After setting up a new oil trading firm with Russia’s Litasco, Iraq’s state marketer SOMO is considering similar ventures in shipping and oil storage, the head of SOMO told reporters.
The new venture, LIMA Energy, is establishing a team to work at the Dubai Multi Commodities Centre (DMCC), it was reported earlier this month, and that it would trade in Iraqi, Russian and other crudes.
The company is expected to initially handle 2 million barrels per month of Basrah Light crude with the scope of increasing those volumes further in the future, Falah Alamri said at the CWC Iraq Petroleum Conference. SOMO is entitled to 50 percent of the company’s profits, he added.
“The idea is not only the money, the idea is to transfer SOMO from a marketing company to a trading company,” he said.
“At the moment we started with one company and if it succeeds maybe [we will] increase to another company with shipping … … storage,” he added.
Iraq has approached oil companies operating in the country and traders that worked with SOMO in the past to share their expertise, sources said, but Litasco, the trading arm of Lukoil was the first company to reach such an agreement.
Other oil companies operating in Iraq will be closely watching to see if LIMA succeeds before considering similar joint ventures, a source with a foreign oil company working in Iraq told reporters on condition of anonymity.
Lukoil operates Iraq’s West Qurna-2 oilfield that holds 14 billion barrels making it one of the world’s largest fields.