Iraq’s Oil Ministry is inviting international companies to compete for nine blocks on the country’s borders with Iran and Kuwait and one in southern Iraq’s territorial waters in the Persian Gulf, which is the country’s first offshore block.
Oil Minister Jabbar Ali Al-Allaibi said amendments have been made to the terms and conditions of service contracts from Iraq’s previous rounds to better achieve production objectives and lower capital and operating costs, but it is not yet clear how the new terms will differ.
Exploration blocks offered include Basra, Mount Sinam, and Faw fields, which lie on the Iraqi-Kuwaiti border. Two main blocks also contain Zardatia, Tariq, Nefta Kana fields, and the Mandali, Habib, Tal Ghazal, Hattab, Nazardak, Saadia, Nabh Khanh, Aqba, and Naudoman fields, respectively. Iraq’s ministry stressed that these blocks fall within the country’s land borders.
The blocks fall within several provinces including Basra, Maysan, Muthanna, Wasit, and Diyala.
Contract qualifications will be announced on May 31, 2018, at which time the new round will be open to receive bids.
Iraq produces 4.5 million b/d with 3.37 million b/d coming from seven large fields, all of which are covered by service contracts with international companies (OGJ Online, Oct. 30, 2017). According to the Arab Petroleum Investments Corp. (APICORP), the government wants oil production to reach 6 million b/d by 2020, but interest has diminished from international producers.
Iraq’s service contracts provide little control over development with margins of only $1.15-2/bbl of oil, according to APICORP. The most recent amendments to Iraq’s service contracts will include improvements for all phases including exploration, development, and production of new discoveries, the ministry said.
Contact Tayvis Dunnahoe at [email protected].
