Iraq Asks Companies to Bid for New Energy Licenses in June
|April 26, 2011||Filled under Uncategorized|
Iraq, eager to boost energy exports to pay for its reconstruction, asked companies to begin submitting bids in June for a new round of exploration licenses and aims to disclose the results in January.
The country also hopes to sign an initial agreement next month for development of the Akkas natural-gas field, Abdul- Mahdi al-Ameedi, the head of the Oil Ministry’s licensing department, said today at a news conference in Baghdad. The Akkas accord was delayed by “internal issues” within Kazakhstan’s KazMunaiGaz National Co., which won a license last year to develop the field with Korea Gas Corp. (036460), he said.
Iraq holds the world’s fifth-largest crude reserves and depends on oil exports for most of its revenue. The nation needs additional foreign investment and expertise to increase output and rebuild an economy shattered by decades of conflict, economic sanctions and sabotage. To help raise output, it has signed 15 licenses for energy exploration since the toppling of former President Saddam Hussein in 2003.
In the latest effort, the government plans to organize a promotional conference in August to attract bids for rights to explore 12 concessions — seven for oil and five for gas, Oil Minister Abdul Kareem al-Luaibi told the conference. The areas cover 88,800 square kilometers (34,000 square miles) across the south, north and west of the country, he said.
Luaibi said on March 22 that the blocks contain a combined 29 billion cubic meters of gas and 10 billion barrels of crude.
April Export Target
Iraq currently exports an average of 2.08 million barrels a day of crude and expects to raise the level to 2.1 million barrels a day by the end of April, Falah al-Amri, head of the State Oil Marketing Organization, told reporters today.
Iraq’s government wants to produce gas to fuel power plants, which have been unable to meet demand. It awarded the contract for the Akkas field in October, along with licenses for the Mansouriya and Siba gas fields. Kuwait Energy Co., Turkiye Petrolleri AO and Korea Gas, known as Kogas, secured rights to develop Mansouriya. Kuwait Energy and Turkiye Petrolleri won bidding for Siba.
“The Iraqi Council of Ministers will hopefully approve the Mansouriya and Siba deals within two weeks, and then we will sign final contracts with the companies,” said Ameedi of the ministry’s licensing department.
Capturing Wasted Gas
In a separate development, lawyers for the Iraqi government, Royal Dutch Shell Plc (RDSA) and Mitsubishi Corp. (8058) will meet next week to discuss the final contract for a $12 billion plan to develop and capture gas that is now flared off and wasted in southern Iraq, Deputy Oil Minister Ahmed al-Shamma said.
“Everything depends on this meeting, which we hope will lead us to an agreement on the final draft of the contract,” al-Shamma said.
The signing for this gas-capture project has been delayed since the government last June approved the creation of a venture to be called Basra Gas Co. State-owned South Gas Co. would own 51 percent of the venture, with Shell holding a 44 percent stake and Mitsubishi the remainder.
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