Iraq has postponed its next energy licensing round by more than a month to May 30, a senior government official has said.
Speaking to Reuters on January 31, Abdul Mahdy al-Ameedi, the Oil Ministry’s Director-General, said the decision to move the date back had been made to allow potential bidders more time to study the contracts following a number of alterations by the department.
“We have made major changes and amendments on the initial contract that concern the economic and contractual terms, and the result was a new model contract,” he said.
“The changes and amendments on the exploration contract were mainly touching the pricing formula and profits of the companies, and how to determine their shares in the contract.”
The two-day round had been scheduled for April 11.
This was the second postponement, with the original auction date delayed last month after a number of requests from international oil companies (IOCs).
“The [existing] technical service contracts are very tight, [as] the Iraqis managed to squeeze companies quite heavily on the terms,” Sam Ciszuk, an analyst with KBC Energy Economics, told The National.
“IOCs were still moving forward with this because of potential future opportunities. Now it seems like those opportunities look fairly unattractive and the Iraqis have seen that they need to do something about that.”
More than 40 operators have qualified to take part in the round, which is expected to add 29 trillion cubic feet (812 bcm) of gas and 10 billion barrels of oil to Iraq’s reserves once exploration work begins.
These include major names such as BP, Shell, ExxonMobil, Lukoil, Total, China National Petroleum Corp (CNPC), Eni, Occidental Petroleum and Chevron.
In total, 12 exploration blocks are being made available, ranging in size from 5,500 to 9,000 square kilometres.
According to the ministry, seven of these are believed to contain natural gas, and five are thought to contain crude oil.
The blocks are located in the provinces of Basra, Najaf, Babil, Muthanna, Diwaniyah and Dhi Qar, south of Baghdad, Nineveh and Diyala to the north and Anbar to the west.
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