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Reuters reports that Iraq has allowed the privately-owned Korean firm SK Innovation to bid in its fourth energy auction, after the company sold its stake in the Bazian block in Kurdistan.

The stake was sold to the state-owned Korea National Oil Corporation (KNOC), which was already barred from participating due to its stakes in both Bazian and Sangaw North.

American oil firm Hess Corp was also excluded from bidding for the similar reasons.

The next licensing round has been repeatedly delayed and is currently expected to take place May 30-31.

(Source: Reuters)

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.

(Source: NewsBase)

NewsBase was founded in Edinburgh, Scotland, in 1995. Its weekly publications cover oil and gas, unconventional resources, LNG, power, petrochemicals, renewable energy and the carbon market. They provide high-level commentary and analysis on developments in Africa, Asia, Europe, the Middle East, Latin America, North America, Russia and the rest of the CIS.

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Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

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Companies Mentioned:

BP, Exxon Mobil, Lukoil, Shell, Statoil, Total

Action Calls:

• Iraqiya ends parliamentary boycott, discusses ending cabinet boycott: Iraqiya fading as Iraq moves towards semi-stable majority government.
• Statoil to sell WQ-2 stake to partner Lukoil: Confirming Statoil's exit in south, perhaps freeing it to look north?
• Iraq again delays 4th bid round auction: Bigger news is Exxon's re-entry onto list of bidders.

Headlines:

• Maliki advisor: oil law pushed to late 2012: Not necessarily surprising, but underlines that Kurds are building facts on ground, rather than relying on promises in Baghdad.
• Turkish official cancels Baghdad anti-terror trip: Minor indicator of larger trend - Erbil-Ankara entente at expense of Baghdad.

Calendar:

• This month - Iraqiya ends cabinet boycott
• Next month - National Reconciliation Conference?

Click here to access the report, or to add your email address to Dunia's mailing list to receive the Iraq Market Tracker via email.

There has been a welcome outbreak of pragmatism in Iraq in recent days.

While the fact that ExxonMobil will apparently be allowed to take part in the auction for the fourth round oil licences was not entirely unexpected, some will see it as a climb down on the part of Baghdad.

Others, such as Hess Corp, which was barred in September as a result of its contracts in Iraqi Kurdistan, will be left in little doubt that some oil companies are more equal than others.

On the party-political front, the return of Iraqiyya deputies to the parliament after several weeks of boycott has generally been seen as a positive, especially with budgets to be finalised.

But this should not lead to any complacency, as tensions between the factions still remain high.

What this all means for the long-awaited hydrocarbon law remains to be seen.

Iraq’s legislation doesn’t prevent oil companies from signing deals with the central government in Baghdad and with the KRG, as ExxonMobil has done, said Adnan al-Janabi, chairman of Iraq’s Oil and Energy Committee.

Speaking on the sidelines of an oil conference in London, he added, "there are no blacklists in parliament".

“With or without the [new hydrocarbon] law, I don’t think there is anything to constrain any company from operating anywhere in Iraq ... I don’t see any legality in announcing anyone as being blacklisted.”

He said he expected a first reading of the law in Iraq’s parliament next month.

As recently as September Baghdad reportedly excluded Hess Corp from participation in the fourth energy licensing round because of its contracts with the KRG.

(Sources: Bloomberg, Reuters)

Reuters reports that Iraq has delayed its 4th energy auction until the end of May.

"The oil ministry has decided to delay the 4th bidding round until May 30-31 to give more time for the interested companies to study the new amended contract," said Abdul-Mahdy al-Ameedi, director of the oil ministry's petroleum contracts and licensing directorate (PCLD).

The auction for the 12 new gas and oil exploration blocks has been delayed several times and had most recently been scheduled for 11-12th April.

(Source: Reuters)

Saudi Telecom (STC), the kingdom’s largest telephone company, has reportedly abandoned plans to bid for Iraq’s fourth mobile-phone licence after delays in awarding the contract.

Ghassan Hasbani, the company’s chief executive officer for international operations, told MEED that they will only be interested in the licence if they receive “concrete” information from the government.

(Sources: MEED, Bloomberg)

Central Bank of Iraq announced that it revaluated the Iraqi Dinar by 3.4% relative to the US Dollar, according to a report from Al Sumaria.

“During the daily auction of foreign currencies’ exchange, the Central Bank raised the value of Iraqi dinar against the dollar by 3.4%, or four Dinars,” the deputy governor of the bank told the news agency.

“The nominal rate of the Dinar doesn’t coincide with its purchasing power or with its real exchange rate against the Dollar,” he reportedly added. “The current account of Iraq payments has a surplus of 5 to 8% of GDP.”

(Source: Al Sumaria)

The Middle East Economic Survey (MEES) reports that Norwegian producer Statoil ASA is trying to sell its stake in the West Qurna-2 oilfield.

According to the report, the company may use the negotiations to improve the terms of the West Qurna-2 contract and decide against pulling out.

If a sale happened, it would be the first re- sale of energy assets awarded to international companies during Iraq’s 2009 auction round.

(Source: Bloomberg)

The Iraqi Central Bank (ICB) said it’s under a “currency attack” as traders buy U.S. dollars in daily auctions and resell them on the black market in Syria and Iran, which face hard currency shortages due to sanctions, according to a report from Bloomberg.

Demand for the dollar at the central bank auctions has risen since November to about $200 - $300 million a day, compared with about $160 million per day over the prior 12 months, the deputy central bank governor, Mudher Salih, said in an interview.

He added, “now we are checking the applications to buy dollars from the auctions more closely. We are afraid that some of it may be related to money laundering. We are now under a currency attack because of the regional situation.”

U.S. Treasury Undersecretary David Cohen said on 1st December that Iranians are having trouble accessing foreign currencies due to the plunge in the value of the rial following sanctions.

Syria, Iran’s regional ally, has also come under greater sanctions from the U.S., Europe and some Arab countries over a violent crackdown on pro-reform protests. A European oil embargo is affecting Syria’s revenues and giving the state far less access to foreign exchange, David Butter, regional head for the Middle East at the Economist Intelligence Unit, said last month.