Iraq launches oil and gas round

30 June 2008
Iraq’s oil minister has announced details of the country’s first oil and gas licensing round since the US-led invasion of Iraq in 2003.

The upstream development round, which will cover eight blocks, is part of the country’s drive to increase oil production to 4.5 million barrels a day (b/d) by 2012, from the current 2.5 million b/d.

Concessions are on offer for six oil fields and two gas fields, oil minister Hussein al-Shahristani announced on 30 June at a news conference in Baghdad.

Companies will be invited to bid for the acreage following the preparation of a legal framework and contract conditions, which should be completed by the end of September, said the minister.

The oil licences will cover the Kirkuk and Bai Hassan fields in the north, the West Qurna and Rumaila fields to the west of Basra, and the Zubair and Meissan fields, also in the south.

All six oil fields are already producing, but the round is expected to increase production by 1.5 million b/d.

Bids are due to be submitted by the end of March 2009, with initial contracts set to be agreed by the following June. Contracts will be awarded on the basis of a service agreement rather than a production sharing model.

International companies will also be invited to bid for gas concessions at Akkaz, in the western province of Anbar near the border with Syria, and Mansouriyah in the east. A bidding schedule for these concessions has not been announced.

The legislative framework for the new contracts is still uncertain. A new hydrocarbons law is still under negotiation, but the possibility of signing the contracts under the existing law has not been ruled out.

Baghdad was also due to announce details of a series of technical service contracts with foreign oil majors on 30 June. However, in a blow to the government’s plans to boost production, news agency AFP says that Baghdad was unable to reach agreement with oil majors on any new deals. (MEED 10:6:08).

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