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Iraq awarded oil contracts to foreign
giants at an auction reports the Associated Foreign Press. Iraq hopes the
contracts will hike output to 12 million barrels a day and put it on a par with
the world''s top producer Saudi Arabia. Baghdad
sold Russian firm Lukoil rights to one of the world''s biggest untapped oil
fields on the auction''s second day, after striking deals with Anglo-Dutch
company Shell, China''s CNPC and Malaysia''s
Petronas. Deals reached at the two-day auction would boost Iraq''s oil
production by more than 4.7 million barrels per day (bpd) over the next several
years, from the current 2.5 million bpd. The biggest agreement struck during
the auction was for the West Qurna-2 oil field, awarded to Lukoil, which will
work with junior partner StatoilHydro of Norway. West Qurna-2, with known reserves
of 12.9 billion barrels, lies in southern Iraq to the west of the equally
enormous Majnoon field, was auctioned to Shell and Petronas. CNPC led a group
comprising Petronas and France''s Total to secure Halfaya, a southern field with
reserves of 4.1 billion barrels. They will receive 1.40 dollars per barrel with
estimated output of 535,000 bpd. Deals were also reached over the Garraf,
Najmah, Qaiyarah and Badra fields. Angolan firm Sonangol won contracts to
develop both Qaiyarah and Najmah, which lie close to each other in the northern
province of Nineveh. Sonangol will produce a combined 230,000 bpd from the two
fields. A joint bid from Petronas
and Japan''s Japex scooped the Garraf field in southern Iraq, and will lead to
additional output of 230,000 bpd. And a consortium led by Russia''s Gazprom was
awarded a contract to work Badra, near the Iranian border, and produce 170,000
bpd. The group also includes Petronas, South Korea''s KoGas and Turkey''s TPAO.
Companies shied away from the East Baghdad field, and two clusters known as
Eastern Fields and Middle Furat. Analysts said this was because of continuing
violence in East Baghdad and Eastern Fields, while Middle Furat was expensive
as it lacked infrastructure. At 115 billion barrels, Iraq has the world''s third-largest
proven oil reserves, behind only Saudi Arabia and Iran. Oil sales provide 85
percent of government revenues.
