Iraq Optimistic About 2nd Licensing Round in December

Iraqi Oil and Gas Developments
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Oil Minister Hussein al-Shahristani
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TOKYO (Dow Jones Newswires), Jul. 10, 2009

Iraq is satisfied with the results of its first round of international tenders for oil and gas fields held in June and believes international oil companies aren't discouraged from bidding in the second round scheduled in December, Iraqi Oil Minister Hussain al-Shahristani said Friday.

Iraq plans to boost its oil output by about 2 million barrels a day from the first bidding round and the target "has been achieved with the awarding of the Rumaila field to a consortium of BP and CNPC," Shahristani said at an investment seminar being held in Tokyo.

In the first round, six oil fields and two gas fields were on offer, but there was only one winner due to wide gaps between conditions the government and bidders sought.

In the second round of bidding, 10 oil fields and one gas field will be on offer. In addition, the Iraqi government plans to make EPC or engineering, procurement and construction contracts for some of its oil fields outside its tender process, seeking a quick boost in oil output. Assets for the EPC contracts include the Nassiriya oil field in southern Iraq, in which a Japanese consortium including Nippon Oil Corp. has shown interest.

Iraq exported an average of 1.85 million barrels a day of crude oil in the first half of this year, the same as the first half of 2008. The country is currently producing around 2.4 million barrels a day.

Iraq's oil output has remained much lower than its potential for the last 30 years due to wars, embargoes and inadequate investments, Shahristani said.

The government plans to boost output to more than 6 million barrels a day in the next five to six years, he added.  

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