Iraq expects strong competition in new oil biddingBAGHDAD (AP) — Iraq's oil minister said Sunday he expects strongcompetition among international oil companies in a second round ofbidding next month on the country's lucrative oil fields.
Forty-fiveinternational oil companies — including Exxon Mobil Corp., Chevron, BPGroup PLC., ConocoPhillips and Total SA — have been cleared to competefor the rights to develop 15 oil fields on offer in 10 projects.
Iraq'sfirst postwar auction in June flopped after most foreign oil companiesrejected the price Baghdad set for each barrel produced. Only onecontract was awarded out of eight oil and gas fields on offer.
"Weexpect the world's biggest oil companies to come and submit theiroffers ... good competitive offers," Oil Minister Hussainal-Shahristani told reporters.
Headded that the per-barrel-produced fee for the second bidding round onDec. 11-12 will be studied carefully for each field to reach a fairprice for development.
The single deal reached in the first roundwent to British oil giant BP PLC and its partner CNPC of China forIraq's biggest oil field, the 17.8 billion-barrel Rumaila field in thecountry's south.
The companies plan to raise production from thecurrent 1 million barrels a day to 2.85 million barrels a day, and willreceive $2 per barrel produced.
Two international consortiums have since revised their bids to develop two other prized oil fields near Rumaila.
Thefirst consortium, grouping U.S. and European oil giants Exxon Mobil andRoyal Dutch Shell PLC, has signed a preliminary deal to develop the 8.6billion-barrel West Qurna Stage 1 field for $1.9 per barrel produced.They aim to boost production from the current 280,000 barrels per dayto 2.325 million.
The second consortium is led by Italy's EniSpA, in partnership with Occidental Petroleum Corp. of the U.S. andSouth Korea's KOGAS. They are to develop the 4.1 billion-barrel Zubairoil field. The consortium aims to boost output to 1.1 million barrelsper day, up from the current 200,000 barrels per day.
Both of the 20-year contracts still need the government's final approval.
Al-Shahristaniestimated the combined projected output from Rumaila, West Qurna StageI and Zubair will exceed 6 million barrels a day in six to seven years.
Although Iraq sits on the world's third-largest oil reserve, the country is producing and exporting far below its potential.
Foreigncompanies are seen as key to reviving the sector and ramping up output,with the increase crucial for Iraq as the nation relies on oil exportsfor 95 percent of its foreign revenues.