Energy
0

Iraq Delays Oil Auction

Iraq Delays Oil AuctionIraq Delays Oil Auction

Iraq has pushed back this month’s auction to award the rights to develop 11 oil and gas fields to international companies by 10 days, after it amended some of the contract terms, Bloomberg reported on Thursday, citing people familiar with the process.

Originally, the oil auction was scheduled to be held on April 15, but one of Bloomberg’s sources said the Iraqi Oil Ministry had rescheduled the auction for April 25 after introducing some changes, to give companies more time to study the new terms of the contract.

"Under the original schedule, most—if not all—interested bidders would have had just two days to evaluate the new terms before the auction," Luay Al Khatteeb, executive director of Baghdad-based research organization Iraq Energy Institute, told Bloomberg.

As many as 16 companies—including Big Oil’s Exxon, Chevron and Total—have expressed interest in taking part in Iraq’s bidding round. The other interested bidders are Eni, Lukoil, Gazprom, Zarubezhneft, Petroliam Nasional Bhd, Oil & Natural Gas Corp, CNOOC, Geo-Jade Petroleum Corp, China ZhenHua Oil Company, United Energy Group Ltd, Dana Gas, Crescent Petroleum and Dragon Oil Plc, according to a document by the Iraqi Oil Ministry.

The oil and gas field development plans include three blocks along Iraq’s border with Kuwait, seven blocks at the Iraq-Iran border and one offshore block in the Iraqi waters in the Persian Gulf, Iraq’s Oil Ministry Spokesman Asim Jihad told Bloomberg at the end of last month.

Jihad told Bloomberg that he was not aware of any delay of the April 15 auction date.

"All companies will be interested, but they will have to check first if the contract terms are favorable," Khatteeb said.

According to Ian Thom, principal analyst for Middle East upstream at Wood Mackenzie, the basin in Iraq “is world-class and is the most prospective across the Middle East”.

“For companies thinking about building a business that’s resilient, having low-cost resources is a good place to start,” Thom said.

Earlier this month, OPEC’s second-largest producer Iraq approved an increase in crude oil production capacity to as much as 6.5 million bpd by 2022.

 

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com