Algeria launches third oil and gas licensing round

Algeria has launched its third oil and gas licensing round in hope of new investment for the country's energy industry. Previous bidding rounds in 2008 and 2009 were largely unsuccessful as international oil companies complained that the terms stipulated by Algeria's state oil company, Sonatrach, were too inflexible to be worth the risks.

According to energy industry insiders Sonatrach is unlikely to make major changes in its terms, but a lot will depend on which 10 blocks are put on offer. The contractual conditions will not be disclosed before 30th September and further "clarification meetings" will take place between October and December, with opening of the bids scheduled for 3rd March.

Sonatrach has a 51 per cent stake in all upstream operations and there's a tax on every barrel of oil sold at more than $30. It is estimated that Algeria has 12.27 billion barrels of oil reserves and 4.51 trillion cubic metres of natural gas reserves. Oil and gas account for 97.5 per cent of the country's export, making it the world's third largest exporter of liquefied petroleum gas, the fourth largest exporter of liquefied natural gas and ninth largest oil exporter.

According to online sources 70 international companies were qualified to bid in the forthcoming licensing round, including Exxon Mobil, Royal Dutch Shell, Total, Gazprom, BP, Repsol and Eni.

Source: UPI

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Iraq to alter signature bonus for Rumaila oil field

Iraqi government has implored BP and its Chinese partner CNPC to turn their signature bonus for Rumaila oil field into an unrecoverable, lower payment rather than a soft loan.

"We have asked from them (BP and CNPC) to convert the $500 million recoverable to $100 million unrecoverable... in line with the rest of the contracts. If it stayed as a soft loan, we have to get parliament's approval for it, and there is no (functioning) parliament right now," said, director of Iraq's oil ministry's licensing office, Abdul-Mahdy al-Ameedi.

Additionally, Iraqi oil minister Hussein al-Shahristani urged international oil producers to honour the contracts they have signed, and said that they needed to,"prove to the whole world that your are able and committed to implement these deals".

BP and CNPC paid a $500 million signature bonus due on the contract they won last year, to develop Iraq's Rumaila oil field. There were 11 contracts awarded in total, several to other international oil companies including Shell and Exxon Mobil who promised to add around 10 million b/d of capacity to Iraq's existing 2.5 million b/d by 2017.

Source: Reuters

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