Iraq may extend the deadline for the resolution of negotiations with Shell governing the creation of the Basra Gas Investment Firm, oil ministry spokesperson Assim Jihad has announced.

Speaking to Agence-France Presse, he said that the ministry will consider extending the talks until all parties agree on satisfactory terms for the creation of the country.

The landmark $4 billion (£2.4 billion) gas production deal was signed in September last year and Mr Jihad insisted that the two parties were "not far off" an agreement setting out Shell's stake in the project.

He added that the project will provide a dramatic cash injection to the Iraqi economy, while strong employment and gas training opportunities will be made available to workers in the country.

The landmark project will also hold benefits for the environmental credentials of Iraq's oil and gas industry as Shell will be charged with reducing gas flaring in the south of the country and processing the fuel for commercial use.

Getenergy event for Iraq October 2009