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Iraq oil ministry postpones upstream bidding round to mid 2017

Gulf Keystone Petroleum Ltd.

Iraq’s oil ministry is postponing a bidding round for 12 small and medium-sized oil fields across three provinces from Nov. 30 to the middle of next year, the ministry said on its website on Thursday.

The ministry’s statement said there are “essential changes” to the previous announcement, including plans for the oil ministry to develop some of the fields itself and adding other fields to the tender.

The ministry announced the tender last month, pre-qualifying 19 bidders including six Japanese firms, the UAE’s Dragon Oil, Mubadala Oil and Crescent Petroleum as well as Glencore Exploration Ltd and companies from China, Russia, Italy, Kuwait, Indonesia, Vietnam, Thailand and Romania.

The ministry said at the time it would allow companies interested in developing the fields to negotiate contract terms as it seeks to move away from the service contract models it has with large oil firms developing its giant fields in the south.

The oil price rout of the past two years has forced the ministry to reconsider those service contracts as it found itself having to repay hefty development costs to oil companies at a time of far lower revenue from oil sales.

Under the service contracts the ministry pays companies a fixed dollar-denominated fee for every barrel of crude produced.

Iraq’s new oil minister Jabar Ali al-Luaibi has been on a drive to boost crude output as quickly as possible to mitigate the impact of lower prices.

(Reporting by Ahmad Ghaddar; editing by David Clarke)

Source: Reuters, November 10, 2016


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