Disappointing turnout in fourth Iraq energy auction

03 June 2012

Baghdad signs deals for a quarter of the blocks on offer

Only three of the 12 oil and gas blocks auctioned in Iraq at the end of May were awarded amid a disappointing turnout from international oil companies (IOCs).

Baghdad held its fourth round of auctions in the post-war period on 30-31 May with only one IOC, Lukoil, winning a bid for a major oil block as the government acknowledged it had set tough terms for contracts.

On 31 May, the Russia-based group and its Japanese partner Inpex won a deal to develop the 5,500 square-kilometre Block 10 in the southern provinces of Muthanna and Dhi Qar, according to media reports.

The day before, a consortium of Kuwait Energy, Dublin-listed Dragon Oil and Turkish Petroleum Corporation (TPAO) won an exploration, development and production contract (EDPSC) contract for Block 9 in Basra province.

Karachi-based Pakistan Petroleum won the contract for gas Block 8 in the eastern Iraq provinces of Diyala and Wasit. The nine other blocks either received no bids or negotiations on terms broke down.

The government said it would open up a fifth round of bidding with 10-15 new oil and gas blocks available and is expected to ease the terms of contracts to attract more IOCs.

The lack of interest is a blow to Iraq’s energy sector as the Opec member looks to increase oil and gas output to boost its economic recovery after years of war and sanctions.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.