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Iraq Organizes Workshop for Oil Cos

The Iraqi oil ministry has invited international oil companies to visit a workshop in Istanbul on Feb. 12-14, there they will be able to bid for Iraqi oil and gas fields development

Iraq Organizes Workshop for Oil Cos

Iraq announced its first licensing round at the end of June, offering eight oil and gas fields to 35 prequalified international companies, including the world's majors.

Those companies which paid participation fees and bought a draft model contract, initial tender protocols and data for the eight oil and gas fields can attend the workshop.

So far 16 world's majors had bought these documents. During the workshop they will have opportunity to make proposals, comments and suggestions on the bidding procedures and contract models of the first licensing round.

Analysis of the latest text of the model contract reveals there was still a gap between the oil ministry and international oil companies on the draft model contract. The gap has been widened by the recent slide on world oil prices.

"Investing in an environment like Iraq isn't very tempting for international oil companies because of the recent dramatic slide in oil prices," an Iraqi analyst said.

The workshop aims to narrow the gap between the oil ministry and companies and for the ministry to issue the final technical service contract by April and award contracts by the summer.

The producing oil fields in questions are Kirkuk and Bai Hassan in northern Iraq, West Qurna -1, North and South Rumaila, Zubair and Missan in southern Iraq. The two non-producing gas fields are Akkas in western Iraq and Mansouriya in the center.

Baghdad hopes contracts for the fields, which are expected to run for 20 years, will help boost the country's crude production capacity to 4.5 million barrels a day by 2012 from 2.4 million barrels a day now.

Iraq also launched last month the second bidding round opening some 15 oil fields and 1 gas field for international investment.

Around two-thirds of the 35 companies that have been "prequalified" to place bids for the first bidding round are international firms like Total SA, Exxon Mobil Corp., Lukoil Holding, Royal Dutch Shell PLC, BP PLC and Chevron Corp.

However, some international companies are still reluctant to go to Iraq to develop the country's vast oil reserves, the world's third largest, because of violence and unstable security situation.

Iraq is planning to hold provincial elections at the end of this month, which could trigger violence.

Author: Ksenia Kochneva


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