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UPDATE 1-Japan firms likely get Iraq oil field deal -paper

Published: 25 Jun 2009 17:50:36 PST

* Iraq has made decision but not made an announcement

* Nippon Oil, Inpex and JGC form Japanese consortium

* Oil output seen at 150,000 bpd for two years -- paper

* Output seen rising to 600,000 bpd after that -- paper (Adds company comment, details, changes slug)

TOKYO, June 26 - A group of three Japanese companies led by Nippon Oil Corp, is in the final stage of talks with Iraq to win the development contract for Iraq's huge Nassiriya oilfield, a Japanese newspaper reported on Friday.

Iraq's Oil Minister Hussain al-Shahristani said on Thursday that the Oil Ministry has selected a company to develop the Nassiriya oilfield and has sent its choice to the cabinet for approval. Shahristani declined to identify the selected company to Reuters.

The Yomiuri newspaper, which did not cite sources, said an agreement could be reached as early as next month. A Nippon Oil spokesman declined to comment.

Italy's Eni, Japan's Nippon Oil and Spain's Repsol were invited to bid for the engineering, procurement and construction contract, but Repsol was no longer considered to be in the running, industry sources have said.

Nippon Oil leads a consortium that also includes Japan's top oil explorer Inpex Corp and plant engineering firm JGC Corp.

The paper said oil output would be 150,000 barrels per day (bpd) for two years after the drilling begins and is targetted to be raised to 600,000 bpd after that.

The project, which will include the setting up of oil refining and power-generating facilities, is expected to cost around 1 trillion yen ($10.4 billion), and the government would provide support via the state-backed Japan Bank for International Cooperation, the paper said.

The Nassiriya contract was initially scheduled to be awarded in late April or early May, but was delayed as Iraq asked for the bids to be revised and resubmitted.

Iraqi officials have said Nassiriya could pump 100,000 bpd within 18 months, while Eni executives have said it could eventually pump 1 million bpd. ($1=95.99 Yen)