Iraq Delays Energy Bidding Round To April - Official
January 04 2012 - 11:34PM
Dow Jones News
Iraq has postponed by a month its fourth oil-and-gas bidding
round, to April 11-12, when it will auction 12 promising
exploration blocks to international companies, a senior Oil
Ministry official said Wednesday.
It had previously said that the fourth auction would be held
March 7-8.
"We have decided to delay...in response to requests from
companies to give them more time to study conditions of the
licensing round and the draft contract model," Abdul Mahdy
al-Ameedi, head of the Oil Ministry's Petroleum Contracts and
Licensing Directorate, told Dow Jones Newswires.
Ameedi said that 37 international firms, including some of the
world's largest, have paid participation fees and bought data
packages for the 12 blocks. He named only two of nine firms that
didn't buy these packages--Japan's Itochu Corp. (8001.TO) and TNK
BP Holding (TNBP.RS).
Some 46 energy companies have qualified to participate in the
bidding round, which is expected to add 29 trillion cubic feet of
gas and 10 billion barrels of oil.
The ministry will make some slight changes to the draft model
contract after receiving requests from companies.
"The main provisions of the service contract will remain as they
are, but we may make slight changes to other provisions," Ameedi
said, without elaborating. He said the final model contract will be
ready in February.
Prequalified companies will compete based on fees that they will
charge for exploring in these untouched blocks. One category will
be allowed to bid as operators for the blocks; a second category
will be allowed to participate in consortia led by operators.
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.
Among those qualified for the auction are BP PLC (BP), Royal
Dutch Shell PLC (RDSA), ExxonMobil Corp. (XOM), Lukoil Holdings
(LKOH.RS), Total SA (TOT), China National Petroleum Corp., or CNPC,
Eni SpA (E), Occidental Petroleum Corp. (OXY) and Chevron Corp.
(CVX).
Seven of the blocks are believed to contain natural gas, and
five are believed to contain crude oil, and the blocks range in
size from 5,500-9,000 square kilometers, officials said.
Iraq holds the world's fourth-largest oil reserves. Its
estimated gas reserves of 112.7 trillion cubic feet are the world's
10th largest, according to U.S. Department of Energy data.
-By Hassan Hafidh, Dow Jones Newswires; +962 799 831 831;
hassan.hafidh@dowjones.com
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