Iraq's Oil Ministry reached agreement on just one deal with energy majors in its first oil licensing round, as companies baulked at Baghdad's tough terms and conditions.
A consortium led by the UK's BP won a deal to develop the Rumaila oil field in the south but only after a group led by the US' ExxonMobil Corporation had earlier rejected the government's proposed fee.
BP with its consortium partner, China National Petroleum Corporation (CNPC), had to drop its remuneration fee to $2 a barrel of oil from its original bid of $3.99 a barrel in order to secure the deal.
While the ministry received bids for four other fields, it failed to secure deals after international oil companies rejected its tight terms.
For the Bai Hassan oil field in the north, a group led by the US' ConocoPhillips bid a remuneration fee of $26.70 a barrel compared with the ministry's maximum of $4 a barrel.
China's two state-run companies Sinochem Petroleum and China National Offshore Oil Corporation (CNOOC) declined to agree to the ministry's fee of $2.30 a barrel for the Missan oil field in the south after they bid $21.40 a barrel.
The UK/Dutch Shell Group led a consortium which submitted the sole bid for the Kirkuk oil field in the north but a deal is not thought to have been concluded by the close of proceedings in Baghdad on 30 June.
Four bids were received for the Zubair oil field in the south but it was again unclear if a deal had been made before the deadline imposed by the ministry.
No bids were received for the eastern Mansouria gas field while one bid was received by the US' Edison International for the western Akkas gas field but a deal was not thought to have been made.
Five bids were tabled by different consortiums for the West Qurna oil field in the south.
The oil licences cover 60 per cent of Iraq's reserves.
The Iraqi government is relying on the licences to produce oil at the six fields to enable it to meet its long-term goal of boosting the state's oil production to 6 million barrels a day (b/d) by 2013, from its current level of 2.4 million b/d (MEED 26:6:09).
- Author: Perry Williams. Senior Energy Writer, London.
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