RIL Chairman Mukesh Ambani
RIL Chairman Mukesh AmbaniReuters

Iraq has shortlisted seven global oil companies including India's Reliance Industries Ltd (RIL) for the development of its al-Nassiriya oilfield.

The $4 billion project includes the construction and operation of a 300,000 barrel per day refinery.

French energy giant Total, Russia's Lukoil, CNPC of China, American's Brown Energy, Russia's Zarubezhneft and Japan's JGC & Tonen General were among the companies shortlisted from a list of 14 that had applied to acquire the contract.

According to reports, the data package and contract terms are yet to be decided and will reportedly be discussed in a meeting which will be held soon.

"The initial meeting with the qualified companies will happen in the first quarter of 2013 and the final award will happen by the end of calendar 2013," said Iraq's ministry of oil website.

"The project cost of the integrated oilfield and the refinery, which is half the size of RIL's Jamnagar refinery, will depend on the kind of incentives and tax breaks Iraq would provide," said an RIL official. The total cost of developing RIL's Jamnagar refinery and the KG D6 block was $6 billion each.

This is RIL's second attempt in entering into a business contract with Iraq. In 2007, RIL's Dubai based wing Reliance Exploration and Production DMCC had taken a 100 percent stake in the Rovi and Sarta blocks of Kurdistan.

However, RIL had to sell its stake following threats of being blacklisted from Iraq which declared that the exploration contract awarded to RIL and other firms by the Kurdistan region to be illegal. RIL's stake was sold to Chevron Corp in July 2012 for an undisclosed amount.

Claiming that the company will be immensely benefitted if it was awarded the contract for al-Nassiriya, Deepak Pareek, senior analyst at Prabhudas Lilladher Securities said, "RIL has the surplus cash. Plus they have proved to the world through their refineries and exploration activity that they are good at what they do," Financial Chronicle reported.

Currently, the OPEC nation is venturing to modernize its oil refineries and double the quantity of oil production capacity for which it is looking for huge investment.

Iraq wants to increase its oil production capacity to 750,000 barrels a day from the current figure of 567,000 coming from the Baiji, Daura and Basra refineries. There are also plans for the setting up of four new refineries in other regions.