Bloomberg News

CGG Postponing Iraq Plans Due to Security Concerns, Chief Says

September 03, 2010

CGGVeritas (GA), the world’s largest seismic surveyor for oil and gas, has delayed plans to start work in Iraq this year because of safety concerns as the U.S. winds down its military presence in the country.

“With the U.S. retiring from Iraq, we’d like to see how it will shape up to see if it is creating more uncertainties, more insecurity,” Chief Executive Officer Jean-Georges Malcor said yesterday in Oslo.

CGG earlier this year had said it expected contracts to start coming out of Iraq in the second half of this year. The holder of the world’s third-largest oil reserves aims to raise production capacity fivefold to 12 million barrels a day in the next six years. Exxon Mobil Corp. (XOM:US), BP Plc and Royal Dutch Shell Plc (RDSA) and other companies have signed contracts after two licensing rounds last year.

“Iraq is an area that we are clearly interested in, but we will not cut corners when it comes to security,” Malcor said in the interview yesterday. “It’s a matter of time -- we will need to do seismic in Iraq, but I don’t want to go there too early and have a major issue with our personnel.”

There are now fewer than 50,000 U.S. troops in Iraq and they are scheduled to leave by the end of next year as President Barack Obama meets an election promise to withdraw. The U.S. has drawn down 70,000 troops in the past year and closed 500 bases as it shifts efforts from combat to assisting and training the Iraqi forces.

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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