Iraq tenders to build three oil refineries-minister

May 11, 2006 - 0:0
BAGHDAD (Reuters) - Iraq intends to build three new oil refineries at a cost of some $6 billion as it seeks to combat petrol shortages and a thriving black market.

Oil Minister Hashem al-Hashemi told Reuters on Wednesday a tender for plants in Nasiriya, Kurdistan and central Iraq had gone out several days ago.

"The capacity (of each) will be between 250,000 to 300,000 barrels a day and the cost for each will be between $1 billion to $2 billion," he said.

"We hope to get the funding."

Iraq has the world's third largest known reserves of oil but decades of war, sanctions, under-investment and now widespread violence and sabotage have left it critically short of fuel.

It has to import nearly half of its gasoline.

Contracts for the new refineries will be awarded and work begun once a new oil minister is appointed.

"It will take at least two years to build them," said Hashemi.

The government continues to control prices, fostering a thriving black market in fuel for those unwilling to queue for hours, sometimes days, to fill their vehicles and able to afford prices many times the official rate.

Oil officials say Iraq's eight refineries are now operating at only between 50 to 75 percent of capacity, forcing the country to import most of its refined products. The three largest refineries are Baiji, Basra and Doura plants.