Iraq Eyes First Oil Field Tenders Early 2008

AMMAN Dec 18, 2007 (Dow Jones Newswires)

Iraq hopes to call the first open tenders to develop its vast oil fields at the beginning of 2008, the country's deputy oil minister said Tuesday.

The ministry is preparing contract models for "the first group of oil fields," Ahmad al-Shammaa told Dow Jones Newswires in a telephone interview from Baghdad. "There are efforts to issue the first round of tenders as soon as possible, hopefully at the beginning of 2008," he said.

He didn't say, however, how many oil fields would be included in the first round of tenders.

An Iraqi oil expert familiar with the Iraqi oil industry said the first round of tenders would concentrate on the redevelopment of the currently producing oil fields. Among these fields, he said, are: Rumeila South, Rumeila North, Subba/Luhais, Zubair, and Missan in southern Iraq, Kirkuk in northern Iraq, and West Baghdad.

Shammaa said Akkaz gas field in Anbar province, northwest of Baghdad was also on the list. Akkaz currently could produce up to 50 million cubic feet of a gas a day.

He said the field could produce between 350 million and 500 million cubic feet of gas if developed. Before the U.S.-led war Iraq signed a preliminary agreement with Syria to supply it with 50 million cubic feet of gas a day from Akkaz gas field, he said.

"The Syrians want to revive that agreement," Shammaa said. Both countries need first to set up a gas pipeline connecting a Syrian gas plant with Akkaz, he said.

Iraq's Finance Minister Bayan Jabor said in Damascus recently that Iraq would soon buy pipes and other equipment to build the pipeline. He didn't say how much it would cost and when work would start.

Shammaa said that Iraq wants to link Akkaz with Europe via Syria in order to export gas to European countries.

The Akkaz exploration block in the Western Desert is one of the most promising fields in Anbar province, U.S. media and officials have reported.

Iraq-Syria Crude Pipeline

The deputy minister said that recently Syria also suggested to Iraq that they restore the crude oil pipeline between Kirkuk oil fields and Syria's Mediterranean terminal of Banias. Before the U.S.-led war in 2003 Iraq used to pump around 150,000 barrels a day via that pipeline although this was done illegally as the country was under U.N. sanctions. The line hasn't worked since the war when one of its pumping stations in Haditha was heavily bombed.

Shammaa said Syria recommended a Russian company called Stroytransgaz to Iraq a few months ago to survey the pipeline to assess what repairs were needed and the costs. "So far the Russian company hasn't done any thing." He attributed the delay to the bad security situation along the pipeline.

The pipeline could pump up to 250,000 barrels a day if repaired, he added.

Iraq sits on the world's third largest oil reserves and international oil majors have been maneuvering to win a stake in them for years despite huge damage to oil infrastructure caused by decades of wars and trade sanctions.

While multinationals generally prefer long-term production-sharing contracts for development, Iraq has signaled more restrictive service contracts may be offered.

Copyright (c) 2007 Dow Jones & Company, Inc.


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