AMMAN (Dow Jones), Dec. 7, 2009
Iraq's super-giant Majnoon will be the first in the 10 groups of oil and gas fields the country is offering to international oil companies in its second post-war licensing auction due to be held in Baghdad Friday and Saturday, Iraqi oil ministry officials said Monday.
The nearly 13 billion reserve field is expected to attract big players, the officials said.
Friday there will be four more groups of oil fields on offer to around 44 international companies eligible to take part in the auction. They are East Baghdad near the capital, the giant Halfaya in the south, Eastern fields, and Qaiyarah field near Mosul in the north, they added.
The second super-giant oil field West Qurna Phase 2 which holds reserves of 12.9 billion barrels will be at the top of the list of oil and gas fields Saturday's bidding round. The other smaller ones are Garraf, Badra (gas field), Middle Furat, and Najmah.
The auction will start 0900 local time (0600 GMT) and ends at 1600 hours each of the two bidding days, the ministry said.
Officials expect tough competition among oil majors for the supergiant oil fields of Majnoon and West Qurna Phase 2, both in southern Iraq.
French major Total SA negotiated alone Majnoon oil field in southern Iraq during the rule of Iraqi leader Saddam Hussein but it didn't sign a contract at that time because of the then United Nations-imposed trade sanctions. Total, now teamed up with Chevron Corp., is expected to put up a fight for the field that could produce well above 2 million barrels a day. Baghdad has set a minimum plateau target of 700,000 barrels a day for the field.
China National Petroleum Corp., or CNPC, Royal Dutch Shell PLC, Exxon Mobil Corp., Sinochem Corp. and Petronas could also challenge Total for Majnoon.
Iraqi officials also expected a tough fight for the supergiant West Qurna Phase 2 oil field in southern Iraq, near the border with Iran.
Russian oil major Lukoil Holdings clinched a production-sharing contract to develop the field during Saddam's rule but the former leader annulled it a year before the U.S.-led invasion in 2003.
Lukoil -- now with its strategic partner ConocoPhillips -- is expected to make sure that it doesn't lose the field as happened in the first bidding round. Then it was pipped to West Qurna-1 by ExxonMobil and Shell in early November despite offering the highest output plateau target -- 2.35 million barrels a day -- during bilateral talks.
The oil ministry has set the minimum plateau for West Qurna Phase 2 at 750,000 barrels a day, but the field with these huge oil reserves could produce between 2.5 million and 3 million barrels a day, the officials said.
ExxonMobil and Shell which won West Qurna-1 in November, could also build on their success and challenge Lukoil for West Qurna Phase 2, they said. China's CNPC could also submit a bid for the field, they added.
Baghdad aims to clinch 20-year service contracts for these oil fields, which mean that winning companies would receive remuneration in kind for each produced barrel as well as cost fees. Big oil companies, however, prefer deals that give them a share of profits and allow them to book reserves.
Copyright (c) 2009 Dow Jones & Company, Inc.
Most Popular Articles
From the Career Center
Jobs that may interest you