Playing Hardball with Iraq’s Oil

Wednesday was Day 1 of Iraq’s two-day auction for the rights to 12 new exploration fields, but the long-awaited and often-delayed event was widely considered a disappointment, with only two bids received and only one deal agreed.

The reason, say critics, is that Iraq is playing hardball on the terms offered to the 47 international exploration firms.

This can be a difficult judgement call for governments, with many regimes around the world accused of selling off their national resources too cheaply, sometimes in return for kickbacks.

Taking a very long-term view, Iraq has many large existing fields to develop, and could easily afford to leave any as-yet-undiscovered oil and gas in the ground until conditions improve and prices are more favourable.

But that’s not the plan, with the Oil Ministry reportedly intending to grant the fields to Iraqi companies if they are not allocated on Thursday.

If that is the case, we will be very interested to see what terms and business models are agreed with these locally-based companies.

Upper Quartile and AAIB work closely with businesses in the Iraqi energy sector. To see how they can assist your business in Iraq, please contact Gavin Jones or Adrian Shaw.

One Response to Playing Hardball with Iraq’s Oil

  1. sheytanelkebir June 3, 2012 at 1:43 pm #

    playing hardball paid off for Iraq. this auction was the first of its kind, and proved the naysayers WRONG by successfully auctioning off 3 of the 12 fields.

    the 5th round, anyone who didn’t bid this time will blink… in a rerun of the earlier service contracts auctions.

    so, be more honest iraqibusiness-news, and report things from an iraqi perspective… I can already read the IOC/western perspective on plenty of western media (FT / WSJ / WP / gloomberg) we need to see a different perspective in an english publications to give the readers a holistic view of the situation.