Among the other companies registered to bid are Eni Spa, Mitsubishi Corp. and Japan Petroleum Exploration Co., Abdul Hadi al-Hassani, vice chairman of the oil and gas committee in Iraq’s parliament said in an interview on Sept. 28. The bidding ceremony is scheduled to begin at 10 a.m. in Baghdad.
Iraq, reliant on oil for most of its income, seeks foreign investors after years of conflict and sanctions. The licensing round is the third since the U.S-led invasion that toppled President Saddam Hussein in 2003. It focuses specifically on the Akkas, Mansouriya and Siba gas fields, which Iraq is eager to develop for domestic power generation as well as export revenue.
The three undeveloped fields hold combined gas reserves of more than 11 trillion cubic feet, Oil Minister Hussain al- Shahristani said in May. Separately, the U.S. Energy Information Administration estimates the reserves at 7.6 trillion cubic feet.
Akkas, discovered in the western Anbar province in 1998, holds 5.6 trillion cubic feet of gas and has six wells, al Shahristani said. Mansouriya, discovered in the eastern Diyala district in 1979, potentially holds 4.5 trillion cubic feet of gas and has four wells, while Siba, found in 1968 in Basra, has 1.1 trillion cubic feet of gas and three wells, al-Shahristani said.
Service Contracts Iraq has the third-largest oil reserves in the Middle East, after Saudi Arabia and Iran, and wants to more than double its current crude output of 2.3 million barrels a day. To raise oil output, the government awarded a dozen service contracts to international oil companies including Exxon Mobil Corp. and OAO Lukoil in two licensing rounds last year.
The 45 companies that bid last year were invited by the oil ministry to bid for the third round this year for the three natural gas fields, where Iraq wants to raise production four- fold.
Iraq intends to export 50 percent of the gas produced in the three gas fields, the amount in excess of its domestic needs, Abdul Mahdy al-Ameedi, deputy director general at Iraq’s Petroleum Contracts and Licensing Directorate, said on Aug. 2.
Companies winning the contracts will be paid on the basis of barrels of oil equivalent and will not be involved in setting the price for gas exports, he said at the time.
No Signature Bonus Among new incentives for investors, Iraq decided to scrap so-called signature bonuses, which amounted to costs of between $100 million and $500 million for each of the winning bidders in the previous two licensing rounds, he said.
Akkas and Mansouriya were among the fields offered in bidding last year. No investors bid for Mansouriya then, and the ministry rejected the sole offer for Akkas made by a group of five companies led by Italy’s Edison SpA.The ministry initially included Siba in the second round then withdrew it.
Iraq will present a draft agreement to the cabinet for a gas joint venture with Shell by the end of the year, al- Shahristani told reporters in Vienna on Oct. 14. Shell is exploring possibilities for exporting liquefied natural gas from Iraq in future years.
The country is also a possible source of gas for the planned Nabucco pipeline project, which aims to reduce Europe’s dependence on Russian fuel.
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