Monday, 1 October 2012

Iraq: Licensing round awards approved

Despite the difficulties that are engulfing its energy sector, Baghdad had some reason to feel good this month. At the end of September, the cabinet approved three of the oil and gas contracts that were awarded to foreign firms in the May licensing round. According to government spokesman Ali Al-Dabbagh, the cabinet approved a gas exploration contract with Pakistan Petroleum to develop gas block 8, a 6,000 sq km block in the east central part of Iraq, about 40km east of Baquba. Pakistan Petroleum won the tender with a remuneration fee of $5.38/barrel oil equivalent.
Also approved was the contract with the consortium led by Russia's Lukoil to develop block 10, a 5,500 sq km site, 120km west of Basra. The cabinet also approved an initial deal with Russia's Bashneft to develop block 12 in the western desert. Bashneft had originally bid on this block as part of a consortium with PetroVietnam as operator. However, the $9.85/barrel remuneration fee bid in the round was too high and the bid rejected. Bashneft has since entered into an agreement with Baghdad for the block.
The cabinet was also expected to approve the contact signed with a consortium led by Kuwait Energy in partnership with TPAO and Dragon Oil for block 9 in Basra. However, according to Al-Dabbagh, the cabinet decided to delay approval until the “oil ministry completes some of its procedures”.
For more news and expert analysis about Iraq, please see Iraq Focus.

© 2012 Menas Associates

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