Oil companies bidding for major stake in Iraq fields

Iraq’s prime minister urged international oil company executives to look beyond their security fears in the country as they began bidding Friday on the biggest stake in the nation’s energy riches offered in decades. Iraqi officials hope the country’s second oil licensing round, which began under tight security in the Iraqi Oil Ministry’s headquarters, will prove more successful than last summer’s auction which netted just one deal despite ample spoils for the companies.

In this two-day round, 15 fields are on offer, representing about a third of Iraq’s known reserves. But a wave of attacks across Baghdad earlier this week killed at least 127 people and shook confidence in the abilities of Iraq security forces as US troops depart.

“There is no security deterioration in Iraq even if a security violation took place here,” Prime Minister Nouri al-Maliki told officials and company representatives gathered at Iraq’s Oil Ministry under extremely tight guard.

A total of 45 firms are vying for 20-year contracts to develop the 15 fields, spanning from northern Iraq to major fields in the Basra region in the south. The biggest field, Majnoon, holds an estimated 12.876 million barrels per day.

The companies include many Western giants like Exxon Mobil Corp. and Britain’s BP PLC, as well as state-backed companies from Asia. Two consortiums submitted bids on the first field on offer, the giant Majnoon field with an estimated 12.88 billion barrels

The deals are crucial for Iraq, which relies on oil for 90 percent of its government budget and sorely needs international companies’ help in boosting production and revamping its dilapidated oil sector.

Tags:  Iraq, oil companies