Iraq Accepts 6 More Firms to Bid for Oil Deals

(Dow Jones Newswires), June 24, 2008

Iraq has accepted six state-owned oil firms to compete for future oil and gas contracts, bringing the number of companies eligible to 41, an Iraqi oil industry source said Tuesday.

An Oil Ministry spokesman confirmed that six oil companies were added to the ministry's list of qualified firms. He said they were from Algeria, Vietnam, Turkey, Angola, Pakistan and Thailand.

The source named the newly qualified companies as Algeria's Sonatrach, PetroVietnam, Turkey's TPAO, Angola's Sonangol, Pakistan Petroleum Ltd. (PPL.KA), and the national oil company of Thailand.

"These companies submitted their qualification papers to the ministry earlier this year and they were studied and found by ministry officials that they were qualified to take part in Iraq's oil and gas fields development," the Oil Ministry spokesman, Assem Jihad, told Dow Jones Newswires by telephone from Baghdad.

Iraq announced in April that 35 international oil companies, mainly majors, were "qualified" to take part in tenders to develop the country's vast oil fields, one of the world's largest.

Baghdad is planning to invite these 41 companies to bid for the development of some of its super giant oil and gas fields at the end of June or early July.

Jihad said Oil Minister Hussein al-Shahristani would announce these tenders June 30.

Iraq sits on the world's third largest proven oil reserves estimated at 115 billion barrels. However, its officials say that Iraq could have up to 300 billion barrels of oil reserves.

Technical Service Contracts

Iraq is in the final stages of striking shorter-term technical service contracts, or TSCs, with oil majors to help boost production in the country's largest oil fields by 600,000 barrels a day. Iraq is currently producing around 2.4 million barrels a day.

Jihad said on these TSCs, the ministry was currently on the process of receiving initial draft contacts from oil majors. Oil ministry officials will study these initial contracts and they would submit them to the cabinet for approval before signing them, he added.

The ministry spokesman said it would take some time before signing these two-year contracts to boost crude oil output in six oil fields. They are West Qurna 1, Zubair, Missan, Rumaila and Luhais in southern Iraq and Kirkuk in the north.

Royal Dutch Shell PLC (RDSB), BP PLC (BP), Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX), Anadarko Petroleum Corp. of the U.S. (APC), France's Total SA (TOT) and Australia's BHP Billiton Ltd. (BHP) have been negotiating with Iraqi authorities these TSCs since the beginning of this year.

Copyright (c) 2008 Dow Jones & Company, Inc.

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