Global Processing

Iraq to offer 10 fields in 2nd oil licensing round

December 30, 2008

Iraq’s oil minister announced that Iraq will offer 10 undeveloped or underdeveloped gas and oil fields in its second postwar licensing round, as reported by the Associated Press. Hussein al-Shahristani did not name all the fields that would be on offer, but said they would include the southern fields of Majnoon and West Qurna Phase 2 which hold reserves of roughly 12 billion barrels of crude each. The two fields currently produce far below their individual output potential of 600,000 barrel per day. Al-Shahristani, in an interview, told the state-run Iraqiyah television station that his ministry has focused on the fields which Iraq shares with neighboring countries, or that are located near borders. Iraq shares several oil fields with neighboring Iran and Kuwait. The Majnoon field, for example, borders Iran. The second licensing round is seen as crucial for the country, which relies on oil revenue for 95 percent of its budget. Decades of wars, U.N. sanctions, violence and sabotage have battered the industry and impaired the country''s ability to ramp up production. The contracts from the upcoming licensing round, along with those from the previous round, could add another 4 million to 4.5 million barrels a day within four to six years. Iraq holds the world''s third largest proven reserves of crude, with more than 115 billion barrels of oil and an estimated 112 trillion cubic feet of natural gas. It currently produces about 2.4 million barrels of oil per day. In June, Iraq opened its first postwar round of bidding for contracts to develop six major oil fields and two gas fields, choosing 34 of 120 oil companies that applied to participate. Among those selected were international energy giants Royal Dutch Shell PLC, BP PLC, ExxonMobil Corp., Chevron Corp. and Total. Ministry spokesman Assem Jihad said that international oil companies which did not qualify in the first round would be eligible for the second round.