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* Siba is south Iraq's first dedicated gas field
* Gas at oil fields usually burnt off
* Government seeking to end flaring to boost revenue(adds oil production average from southern Iraq in April)
By Aref Mohammed
BASRA, Iraq, April 25 (Reuters) - Kuwait Energy PLC<IPO-KEC.L> started producing natural gas from Siba onWednesday, the first gas field to be brought on stream in thesouth of Iraq, an Iraqi oil executive told Reuters.
Siba began producing gas at an initial rate of 25 millioncubic feet a day (mcf/d), which should rise gradually to 100mcf/d by the end of the year, said Kareem Abd Oda, the directorgeneral of the joint venture established by Iraq and KuwaitEnergy to develop the field.
Siba, south of the city of Basra, is producing natural gasand gas condensates, he added.
The other hydrocarbon reservoirs of southern Iraq that arealready in operation produce natural gas alongside crude oil.
The gas extracted in several of these fields is burnt offinstead of being captured, as the country lacks the capacity toprocess it into fuel for local consumption or exports.
The semi-autonomous Kurdistan Regional Government hasstarted producing natural gas from fields in northern Iraq.
Iraq hopes by 2021 to end gas flaring, which costs nearly$2.5 billion in lost revenue for the government and would besufficient to meet most of its unmet needs for gas-based powergeneration, according to the World Bank.
Iraq holds on Thursday an auction of oil and gas explorationcontracts in 11 blocks alongside the border with Iran and Kuwaitand in offshore Gulf waters. The new contracts set a time limitfor companies to end gas flaring from oilfields they develop.
Iraq is the Organization of the Petroleum ExportingCountries' second-largest producer after Saudi Arabia.
Companies including BP, Exxon Mobil, Eni, Total, Royal Dutch Shell and Lukoilhelped Iraq expand production in the past decade bymore than 2.5 million barrels per day (bpd) to about 4.7 millionbpd.
Iraq's crude exports from its southern region on the Gulfhave averaged 3.5 million bpd so far in April, two oilexecutives told Reuters on Wednesday.
That is higher than the March average of 3.45 million bpd.(Reporting by Aref Mohammed; Writing by Maher Chmaytelli,Editing by Louise Heavens and Mark Potter)
