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Iraq’s government signed deals for only three of the 12 oil and gas exploration blocks offered in its fourth energy auction, which ended on Thursday, reflecting reluctance of foreign bidders to risk money in unexplored areas.

Russia's LUKoil, along with partner Inpex Corp of Japan, won the deal for the 5,500-square-kilometer Block 10 in Muthanna and Dhi Qar provinces in the south of the country. The group will be paid $5.99 for each barrel of oil equivalent it finds.

A bid from Pakistan Petroleum also won gas Block 8 in Diyala and Wasit provinces in eastern Iraq. It will receive $5.38 per barrel of oil equivalent.

Four other blocks and two from the first day that were re-offered received no bids.

The second day of bidding followed a sluggish start to the auction Wednesday, when only one block was allocated.

Washington Post reports that Oil Ministry spokesman Assem Jihad said the government is not disheartened: "We do not consider three successful bids as a disappointing matter, taking into consideration that foreign companies in general do not like to take risks on unexplored areas."

(Sources: Bloomberg, Washington Post, NINA, RT)

The first day of Iraq's fourth energy auction resulted in just one successful bid, with four of the today's six exploration fields receiving no bids from the 47 pre-qualified bidders. The six blocks offered today were numbers 2, 9, 6, 12, 1 and 11.

A consortium of Kuwait Energy (40%), Turkey's TPAO (Turkiye Petrolleri AO) (30%) and the UAE's Dragon Oil (30%) won the rights to explore a 900-square-kilometer (350-square-mile) Block 9, near the Iranian border in the oil-rich southern Basra province. It will be paid $6.24 for each barrel of oil equivalent it finds.

An unsuccessful bid was made for the rights to the 8,000-square-kilometer (3,100-square-mile) Block-6 in the southern Anbar and Najaf provinces. A consortium led by UK's Premier, along with Vietnam's PetroVietnam and Russia's Bashneft, sought $9.85 for each barrel of oil equivalent, but the government offered to pay only $5 per barrel and withdrew the lot.

Four other blocks attracted no bidders. The bidding will continue on Thursday for the other six blocks, and for blocks 2 and 6 which will be offered again to give companies that weren’t present today a chance to bid. Seven of the 12 exploration blocks are believed to hold natural gas, and the rest both natural gas and oil.

The oil minister said that if Thursday's auction also attracts little interest, Iraqi companies would explore those lots, ruling out the possibility that contract terms would be revised.

(Sources: AKnews, AFP, Associated Press, Bloomberg)

Russia’s Lukoil is seeking partnerships with Asian oil firms to develop the West Qurna-2 project.

The company's Vice-President, Leonid Fedun (pictured), told investors at a company presentation in Hong Kong:

“We are holding talks with several potential bidders, including Asian firms. I believe we may get positive news by the end of this year.”

Lukoil was originally granted a 56.25% stake in the field in 2009, with Norway's Statoil holding 18.75% and Iraq's state oil company the remaining 25%. However, in March Lukoil agreed to buy Statoil's, bringing its holding to 75%.

With estimated reserves of 12.9 billion barrels, West Qurna-2 is one of the world's largest oilfields.

(Source: RT)

Halliburton has won a $95 million contract from Russian state oil producer Gazprom Neft to test and complete 11 wells at its Badra oil field in eastern Iraq, according to the Wall Street Journal.

Gazprom said testing of the first well is scheduled to start in the third quarter of this year. "Production will commence once the final field development plan is completed in 2013," the Russian firm said.

The field, which has estimated reserves of 100 million barrels of oil, is being developed by Gazprom (30%), Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

(Source: Wall Street Journal)

Wheat prices surged on Wednesday after Iraq said it bought 400,000 metric tons from the U.S., Australia, Russia, Romania and Kazakhstan.

The contracts are for delivery in July and August, a spokesman for the grain board told Bloomberg.

(Sources: Bloomberg, Reuters)

Russia’s Gazprom Neft is expecting to start exporting from its East Badrah oil field in Wasit [Wassit] province early next year, according to AKnews.

Alexander V Kolomatsky, Project director for the Middle East at Gazprom, said the company had initially planned to reach the 15,000 bpd level by the last quarter of 2013 because the oil field, which is near Iraq’s border with Iran, had to be first cleared of landmines.

But progress in the de-mining work however has led to this figure being pulled forward to early 2013, with 60,000 bpd expected by mid year, and 120,000 bpd by the beginning of 2014.

The field, which has estimated reserves of 100 million barrels of oil, is being developed by Gazprom (30%), Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

(Source: AKnews. Iraq Energy)

Lukoil, Russia's second-largest crude oil producer, has confirmed that it will be able to develop Iraq's West Qurna-2 oilfield without partners.

"Today we are able to implement this project by ourselves," president Vagit Alekperov told reporters in the Spanish city of Barcelona on Friday.

Reuters reports that production from the field will reach 150,000 barrels per day by the end of 2013, and increase steadily to 500,000 barrels in the second half of 2014.

(Source: Reuters)

Russia's Deputy Prime Minister, Dmitry Rogozin, said on Tuesday that both Libya and Iraq continue to show interest in buying Russian-made weaponry despite regime changes in these countries.

According to RIA, the minister, who oversees the Russian defense industry, told reporters in Moscow: “The Libyan military leadership and the Iraqi government have shown serious interest [in Russian weaponry].”

After the fall of Saddam Hussein regime in Iraq and Muammar Gaddafi’s regime in Libya, many experts had suggested Russia lost both lucrative arms markets.

He said acting Iraqi Defence Minister, Sadoun al-Dulaimi [Sadun al-Dulaymi] (pictured), had recently visited Russia and discussed the current state of bilateral military-technical cooperation with the Russian officials.

(Source: RIA)

Exxon Mobil is conspicuously absent from the finalized list of 47 pre-qualified bidders for the Iraq's fourth round of energy exploration rights.

The Petroleum Contracts and Licensing Directorate (PCLD) at the Ministry of Oil has confirmed that the auction will take place as scheduled on May 30-31.

The full list of pre-qualified companies is shown below:

Shares in Heritage Oil (LSE: HOIL) closed down 2% on Wednesday following the announcement of its results for the twelve months ended 31 December 2011:

2011 Operational Highlights

• Awarded new licences in Tanzania which Heritage believes could be geologically analogous to the Lake Albert Basin, providing the Company with a key advantage in assessing the blocks
• Entered Libya through an acquisition which makes Heritage well placed to be able to play a significant role in the future development of the oil and gas industry in Libya
• Appraisal drilling, in Kurdistan, commenced on the Miran West-3 well and results to date have confirmed oil in the Upper Cretaceous and gas in the Lower Cretaceous and Jurassic reservoirs
• An interval, above the main Jurassic reservoir, in the Miran West-3 well has recently been tested and resulted in a flow of up to 17.5 MMscfd of dry gas
• Acquired seismic on the southern portion of the Miran Block which has identified the presence of a structure capable of containing additional resources
• Completed seismic in Mali, Malta and Tanzania
• Drilled first horizontal well in Russia which exceeded pre-drill expectations resulting in a year-on-year increase in production of 24%

2011 Financial Highlights

• Cash of $311 million, excluding amounts relating to the Ugandan tax dispute
• Production averaged 673 bopd, an increase of 24% from 2010 levels
• Average realised price of $36.9/bbl, an increase of 45% from 2010 levels
• Total cash capital expenditures increased to $135 million

Outlook

• Miran East-1 well commenced drilling in March 2012 with results expected at the end of the third quarter 2012
• Further test results expected from the Miran West-3 well
• Undertaking work to identify a suitable drilling location in the southern portion of the Miran Block
• Work programmes are commencing in Tanzania on newly awarded acreage
• Planning for a high-impact exploration well offshore Malta
• Actively looking for further opportunities

Tony Buckingham (pictured), Chief Executive Officer, commented:

"2011 has been a year in which we have enhanced the asset portfolio through the addition of acreage, investing in opportunities and through existing work programmes. We currently have two rigs drilling in Kurdistan and are reviewing results from seismic campaigns that could provide future growth in the portfolio. We are looking to further develop the existing portfolio and continue to look for value generating opportunities within our core areas."