Iraq's Oil Field Bidding Process on Schedule

AMMAN (Dow Jones Newswires), Jun. 9, 2009

Iraq is gearing up to award eight of its prized oil and gas fields to international companies as scheduled June 29-30, a senior Iraqi oil ministry official said Tuesday.

"There is no change - the first bidding round will be held as scheduled," Abdul Mahdy al-Ameedi, deputy director general at Iraq's Petroleum Contracts and Licensing Directorate, or PCDL, told Dow Jones Newswires by telephone from Baghdad.

There have been rumors that the first landmark bidding round might be canceled because Oil Minister Hussein al-Shahristani, who engineered the bidding round, would be summoned by the country's parliament for questioning.

Several parliamentarians oppose Shahristani's oil polices, arguing that he has failed to raise production during his three years in office.

Some 32 international companies, including oil majors such as Royal Dutch Shell PLC (RDSB.LN), Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), BP PLC (BP) and Total SA (TOT), are expected to take part in the bidding process, planned to be held in Baghdad. The Oil Ministry had pre-qualified 35 international companies for the first bidding round which was announced a year ago.

The ministry is planning to award 20-year long service contracts, which mean that winning companies would receive remuneration in kind for each barrel produced as well as costs. Oil majors prefer deals that give them a share of profits and allow them to book reserves.

The oil fields in questions are Kirkuk and Bai Hassan in northern Iraq, West Qurna-1, North and South Rumaila, Zubair and Missan in southern Iraq. The two non-producing gas fields are Akkas in western Iraq and Mansouriya in the center.

Baghdad hopes contracts for the fields will help boost the country's crude production by 1.5 million barrels a day by 2012. Iraq is currently producing 2.4 million barrels a day.  

Copyright (c) 2009 Dow Jones & Company, Inc.

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