Processing Magazine

Iraq lays out rules for first round of oil bids

October 13, 2008

The Associated Press reports that Iraq''s oil minister has met with 34 oil company representatives in London to set out the ground rules for the first round of bidding for new contracts since Saddam Hussein was removed from power. At the top of the list: Royal Dutch Shell PLC, BP PLC, ExxonMobil Corp., Chevron Corp. and Total SA, all eager for a shot at helping extract some of the 115 billion barrels of oil thought to lie beneath Iraq''s surface. The process is highly sensitive. Multinationals are eager to establish themselves in a country thought to have the world''s second-largest proven oil reserves, but they want to avoid fueling accusations that the war in Iraq was fought on their behalf. And while Iraq''s oil industry badly needs foreign investment, Iraqi officials don''t want to be viewed bowing to Western oil interests. Officials in Iraq say the conference''s purpose is to help the world''s energy giants prepare their bids for 20-year service contracts at Iraq''s biggest oil and gas producing fields. Iraqi officials will present the companies with tender protocol, contract terms, and legal and technical details -- including geological data and production targets. Iraq''s Oil Ministry has hired British energy consultant Gaffney, Cline & Associates Ltd. to help present the data and the draw up the contracts. The ministry has given the firms a six-month deadline to submit their bids. It plans to announce winners in June 2009.