The project is nearing completion and is scheduled to open in September this year
realty2 hours ago
Baghdad had offered the auction as the latest step to rapidly build up Iraq’s energy sector after years of war and sanctions, but officials and executives said economics of the contracts especially on gas deals, kept companies away.
During the first day of auctioning on Wednesday, foreign companies made no offers on four oil and gas blocks and a group led by UK-based Premier Oil rejected a government offer on the fee for a fifth block, scuttling an agreement there.
Only a consortium led by Kuwait Energy and partners Turkey’s TPAO and Dubai-based Dragon Oil secured a deal to explore Block 9, a mainly oil area in southern Basra province. They offered a remuneration fee of $6.24 per barrel of oil equivalent.
Block 9 is adjacent to neighbouring Iran’s huge Azadegan oilfield. Western geologists say there is discovered oil in the block and add it may be part of the Azadegan reservoir.
“We believe the contracts serve the interests of the companies and Iraq. But they have a different view,” Abdul Mahdy Al Ameedi, director of the ministry’s contracts and licensing directorate, said. “That is why only one block was awarded.”
Another six blocks are scheduled to go up for auction on Thursday, alongside at least of the two blocks initially rejected on Wednesday. Bidding was decided according to the remuneration fees offered, with the lowest bids winning blocks. Industry sources had said companies would have to offer $10 to $20 a barrel for the service fee to compensate for risks involved. Iraq had eased the terms on the service contracts in an attempt to lure interest, but companies are generally more wary of service agreements — where they are paid a fee — rather than production-sharing deals that allow them to profit jointly from the output.
“With tough gas contract terms, and all the other risks around these blocks, we don’t expect much interest from companies,” said one senior company executive involved in the bidding, who asked not to be identified because of the sensitive nature of the negotiations. Iraq has the world’s fourth-largest oil reserves and the tenth-largest gas reserves, and still offers potentially rich unexplored territories after its industry was left under-developed for years.
Violence from the country’s war has ebbed sharply, and major international oil companies like BP and Exxon have already signed major deals to develop oilfields in the south, where current average exports are 2.13 million barrels per day and output 2.35 million bpd.
The project is nearing completion and is scheduled to open in September this year
realty2 hours ago
Earlier this month, the fast food chain agreed to acquire Alonyal, which owns 225 McDonald's restaurants in Israel which have been hit by calls for a boycott
world2 hours ago
The Palestinian militant group said it was considering a plan for a 40-day ceasefire and the release of scores of hostages
mena2 hours ago
The Reputation House is one of the two companies from the UAE that have been honoured this year
kt network2 hours ago
Aiden Markram will captain the squad, which also includes power hitters Heinrich Klaasen, David Miller, Quinton de Kock and Tristan Stubbs
cricket2 hours ago
It's time to confront the addiction and break the chains for our own physical and mental well-being
wellness2 hours ago
Travellers won’t need to stop for immigration, check-in, security or customs, says top official
aviation2 hours ago
In the past, several ‘post box’ entities operated out of Mauritius only to secure the tax benefit in India
business2 hours ago