Several Firms Show Interest in New Iraq Oil Bidding Round

- Several Firms Show Interest in New Iraq Oil Bidding Round

Thursday, July 07, 2011
Dow Jones Newswires
AMMAN
by Hassan Hafidh

Several international companies have submitted documents to the Iraqi oil ministry to qualify them to take part in the country's fourth oil and gas licensing auction scheduled for January, one document and persons close to the ministry said Thursday.

According to people who saw a recent document issued by the oil ministry, at least 27 international companies have paid fees to the ministry to qualify them to take part in the bidding round to auction 12 exploration blocks located in various parts of Iraq.

"The ministry is studying documents of these companies and a list of pre-qualified companies is expected to be issued within the next two weeks," a ministry official, who asked not to be name for security reasons, said.

Among the companies mentioned on the oil ministry's list that want to take part in the auction are Chevron, ONGC Videsh Ltd., Vitol Holding B.V., GulfSands Petroleum, Enel Energia, Petrol Resources PLC, TNK-BP, and Dana Petroleum.

The list also includes six Japanese firms. They are INPEX, Japan Oil, Gas and Metals National Corp., or JOGMEC, Mitsui Oil Exploration, JX Nippon O&G, or JX-NOEX, Itochu and Toyota Tsusho.

The only Arab company in the list is Mubadala Oil & Gas of the United Arab Emirates.

Iraq, which sits on the world's third largest oil reserves, has held three bidding rounds in the past two years to auction off 15 of the country's most prized oil and gas fields.

Three of the announced blocks are located in the western Anbar province while two others are shared by the Anbar, Nineveh and Najaf governorates. The sixth is in Nineveh governorate in northern Iraq. These six are believed to contain gas resources, oil ministry officials said.

The remaining five blocks, believed to contain crude oil resources, are located in other governorates including Basra, Dhi Qar (Nassiriyah), Muthanna (Samawa), Babil, Najaf, Wasit and Diyala provinces, the officials said.

The size of the blocks range from 5,500 square kilometers to 9,000 square kilometers, they added.

Iraq needs to boost gas production and build more gas-fired power plants to increase its power output, currently at 6,500 megawatts, which represent less than half the country's needs.

Although international companies would prefer production-sharing contracts for exploration blocks, Iraqi oil officials said the deals would be based on a service contract, which means winning companies will be paid a flat fee for their services rather than be given a share in the resources. But it would be slightly different from the 20-year service contract offered in the previous three bidding rounds, they said.

"The remuneration fee for each produced barrel or equivalent in the exploration contracts is expected to be more than that in the awarded oil fields," one official said.


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