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.


Copyright (c) 2011 Dow Jones & Company, Inc.

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Libya leaves it late for Opec show

- Libya leaves it late for Opec show

Jun 9, 2011
April Yee

VIENNA // Libya waited until the last minute to send a delegate to yesterday's Opec meeting in what is being interpreted as a message the regime led by Muammar Qaddafi remains in control despite the ongoing civil war.

Omran Abu Kraa, Libya's former electricity chief, entered Opec headquarters hours into yesterday's ministerial deliberations through a basement garage, avoiding reporters waiting at the building's entrance. Since conflict gripped the country in February, its energy industry has been crippled by the exit of foreign oil companies, international sanctions and attacks on infrastructure.

"They want to still have a say," said Catherine Hunter, an analyst with IHS in London. "It keeps the illusion of normality. It's not a done deal that the government side will not prevail, so they've got to keep up their representation as a sovereign state. It would be an admission of defeat to not come."

Libyan rebels adjust an anti-aircraft gun as smoke from a damaged oil facility darkens the sky in Ras Lanuf, Libya. Getty Images

The organisation that controls more than 40 per cent of the world's oil supply was meeting for the first time since popular uprisings took place in parts of the Middle East and North Africa and sent the price of oil as high as US$127 a barrel.

In Libya, civil war has shut down most of its production capacity of 1.6 million barrels a day (bpd).

Last week Libya's former top oil official, Shokri Ghanem, announced his defection from Col Qaddafi's regime and stepped down from his post as Libya's head Opec negotiator and chairman of National Oil Corporation, the state oil company.

At stake yesterday was whether Libya should be exempt from a system that caps the production of member countries. If Libya were to join Iraq in being exempt from the quota system, the significance of Opec's output target could be further eroded. The ceiling is now at 24.8 million bpd, but members pump about 1.5 million bpd in excess of that, according to most estimates.

"Libya is almost theoretical at the moment because it can't actually ramp up production," said Ms Hunter, adding that redistributing Libya's quota would be an impractical solution for Opec. "What happens when Libya comes back? There's so much sensitivity about the quota system to begin with. Anything that would affect new lines in the sand on quota distribution would be contentious and would probably take more than a day."

Before the start of yesterday's meeting Libya's seat was conspicuously empty. But officials made an effort to project a common front.

"We have to be united," said Abdullah el Badri, the secretary general of Opec. "We have no other choice."

Mr el Badri deflected questions about Libya, his home country, and said he would "facilitate anybody who will want to come here".

Representatives of Libya's opposition forces, who had said they were interested in sending delegates to the meeting, were nowhere to be seen.

"At Opec, they don't want to do these things — invite rebels — otherwise they might have problems in the future," said Ehsan Ul-Haq, a senior market consultant with KBC, an energy economics consultancy. "And Opec doesn't want to create problems."

Mohammed al Sada, the oil minister of Qatar, who has backed the opposition in Libya by providing military aid and marketing Benghazi crude, insisted the discussions would not be affected by politics.

"The focus today is the economy," he said. "The focus is the supply and demand, the fundamentals.

"This is an economic type of forum so we are not addressing the political issue, though Qatar recognises the National Transitional Council and helping our Libyan brothers in many facets; we're going to continue."

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