Second round of bidding on Iraqi oil fields opens in Baghdad

Fri, 11 Dec 2009

Baghdad - Iraq on Friday opened bidding on 10 Iraqi oil and gas fields, including some of the richest fields in the world, to the world's leading energy companies. Companies from 23 countries will compete for the rights to develop the untapped fields in the second round of a bidding process that began in June, Oil Ministry spokesman Assem Jihad said.

The Majnoon and the West Qurna-Phase II fields, each with proven reserves of more than 12 billion barrels, are expected to attract the most interest from the world's largest energy companies.

The auction will take place in the shadow of a stunning series of bombings that on Tuesday killed as many as 127 people and injured more than 500 in central Baghdad. Some of the fields up for grabs in the weekend's auction, such as the Nijm field in northern Iraq's conflict-riven Nineveh province, are in areas with tenuous security.

Many companies balked at the Oil Ministry's terms at the first round of bidding last June. A consortium led by BP and China's CNPC won a contract to develop the massive Rumaila oil field in exchange for 2 dollars a barrel, but other companies held out, seeking a return of 4 dollars a barrel on their investment.

Shell and Exxon in November agreed upon a contract to develop the West Qurna-Phase I field for a price toward the 2-dollars-a-barrel figure. And a group led by Italy's ENI struck a deal to develop the Zubair field for 2 dollars a barrel.

The Iraqi government, which relies heavily on oil exports for its revenue, hopes foreign investment will boost production to 6 million barrels of oil per day (bpd) within seven years, more than twice its current output of roughly 2.5 million bpd.

Source: Earth Times.
Link: http://www.earthtimes.org/articles/show/298837,second-round-of-bidding-on-iraqi-oil-fields-opens-in-baghdad.html.