Iraq oil industry rehabilitation bids to be invited 'in weeks'

24 April 2003
Bidding on the programme to rehabilitate the Iraqi oil industry will begin within weeks, a US Army Corps of Engineers (USACE) spokesperson told MEED on 24 April. He was speaking following news that Fluor Corporation of the US and Amec of the UK had formed a joined venture to bid for work in the programme, which is being financed by the US' Department of Defence.

The spokesperson said that an acquisition strategy meeting for the programme was held in Washington on 21 April. Planning for the project has been completed by the USACE and Kellogg Brown & Root, which was appointed in March to manage the first-phase reconstruction of Iraq's oil infrastructure. That contract called for the Houston-based firm to implement a contingency plan it developed for the Department of Defense in January for assessing and extinguishing oil well fires in Iraq and evaluating and repairing the country's oil infrastructure. The USACE has been designated as the US government executive agent for extinguishing oil well fires and assessing the condition of Iraqi oil facilities.

'The primary focus of the new contract work is to get the oil industry back to pre-hostility levels,' the spokesperson said. Before, the start of the attack on Iraq in March, the country was producing up to 2 million barrels a day (b/d) of oil. Production ceased with the start of hostilities on 20 March, but resumed with output of 50,000 b/d of oil from the South Rumaila field on 22 April.

It has not yet been decided whether the project will be put out to tender in a single contract or in several contracts. The spokesman said that there will be no restrictions on the nationality of companies bidding for USACE contracts and that the work will be put out to open and competitive tender among firms satisfying the corps' requirements. This is in contrast to the policy pursued by the US Agency for International Development (USAID) in its initial Iraq relief and reconstruction contracts, which have been offered, in line with federal law, to US firms only. None of the eight original contracts were put out to open tender. USAID officials say, however, that foreign firms can win up to 50 per cent of the value of work offered in the programme.

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