Iraq Energy reported that Iraq’s Oil Ministry will not only take a major step forward to bringing foreign oil companies into Iraq’s nationalized oil sector.
Beyond beginning a bidding process for a handful of key oil and gas fields, the ministry will outline a second group of oil and gas fields up for grabs by International Oil Companies. Petroleum Intelligence Weekly reports the two rounds account for 94 billion barrels of Iraq’s 115 billion barrels of proven reserves.
PIW also includes
1. Service contracts will allow companies to book reserves
2. Fields in northern areas, Diyala and Kirkuk provinces could spark rows with the Kurdistan Regional Government
3. Winners will have lowest fees will pay a signing bonus based on field’s potential and taxes, pay to the IOC will be linked to an internal rate of return with 18% considered acceptable to Baghdad.
4. Development will mandate a JV with a state owned oil company though what the state will get out of that and what control it will have is still unknown.
Premier Oil the UK explorer has been replaced by state owned Turkiye Petrolleri AO in the list of prequalified companies bidding for oil contracts in Iraq.
Mr Asim Jihad Iraq’s Oil Ministry spokesman recently said by phone from Baghdad that “Premier Oil is out because it is too small. The Turkish government company is now in the bidding round and there are a total of 35 companies.”
An independent source close to the ministry said that Premier was excluded because it was involved through another company in oil deals signed by the Kurdistan Regional Government or KRG with international oil firms. A ministry official said the company failed to submit documents required for it to compete in a bid due to start next month.
International Oil Daily reports, UK’s Premier Oil was dropped for failing to provide the necessary technical and financial documents. One condition set by the ministry was that the output of a company wanting to bid should be above that of the Iraqi field it seeks to operate.
The official said that “Premier’s qualification based on the technical and financial criteria does not allow it to participate in the first bid round, which includes mainly giant fields. However it will be able to participate in the next rounds.”
