NEW DELHI , May 25, 2007 (Dow Jones Newswires)
Indian companies wanting to secure much sought-after rights for oil and gas exploration and production blocks in Iraq will have to compete with rival bidders from other countries, Iraq's oil minister said Friday.
This rule would also apply to India's Reliance Industries Ltd. (500325.BY) and ONGC Videsh Ltd. who had previously negotiated for the Tuba oil field, Hussein al-Shahristani told a press conference. Shahristani is on a three-day official visit to India.
Iraq has the third-largest proven oil reserves after Saudi Arabia and Iran but only 10% of the country has been explored, according to the U.S. Energy Information Administration.
However, U.S.-led forces invaded Iraq before an agreement could be reached with the regime of former President Saddam Hussein.
Iraq is currently engaged in drawing up a draft bill that would provide a framework for foreign investment in the oil and gas exploration sector.
Under the law, all foreign companies would be required to bid for oil and gas assets.
Iraq plans to announce a licensing round for oil and gas blocks in the second half of 2007, the minister said without elaborating on the number of blocks that could be offered.
On Wednesday, a senior Iraqi official said the country is planning to offer 15 blocks under the proposed round.
For the new round to be announced, Iraq has to approve the law, something which Shahristani hopes will be done in the next two months.
However, the proposed legislation wouldn't apply to exploration Block 8 that ONGC Videsh secured in 2001, he said.
Work on the block has been suspended since the U.S. invasion and efforts are ongoing to resume exploration.
Copyright (c) 2007 Dow Jones & Company, Inc.
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