Baghdad excludes Hess from fourth oil round

04 September 2011

US Firm was previously qualified to bid in January auction

Iraq’s Oil Ministry has excluded US oil firm Hess Corporation from participating in its fourth oil and gas field licensing bid round, scheduled for January 2012 due to the company’s contracts with the semi-autonomous Kurdistan Regional Government (KRG).

“Hess was taken out of the pre-qualified international companies list because it signed two contracts with the KRG,” says Abdul-Mahdy al-Ameedi, director of the Oil Ministry’s petroleum contracts and licensing directorate, Dow Jones newswire reports.

Hess had been listed among 41 international oil firms prequalified by the Oil Ministry earlier in August, out of 50 firms that submitted documents before the 6 June deadline.

In late July, as the documents were being assessed by the Oil Ministry, Hess signed two production sharing agreements (PSAs) with the KRG for the Dinarta and Shakrok blocks. Both blocks are to be operated by Hess, with Ireland’s Petroceltic as a joint venture partner (MEED 28:7:11).

The Oil Ministry previously blacklisted China’s Sinopec from participating in Iraq’s first and second licensing rounds in 2009, after the company purchased Swiss oil producer, Addax Petroleum which had signed a PSA with the KRG.

The KRG has signed more than 35 PSAs with international oil firms since 2007. The Oil Ministry, however maintains that only it has the right to sign oil development contracts with the approval of the central government.

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