Iraq Opens Bids for Oil Fields

Iraq auctioned contracts Tuesday to run eight huge oil and gas fields, but only made a deal on one of the fields.

A consortium including BP and China’s CNPC accepted a contract to expand production in the largest oil field on offer, Rumaila in the south.

A group that included ExxonMobil rejected the terms, which offered the companies a fee of $2 a barrel for production above a certain minimum amount.

The oil companies had asked for about twice that amount or more. The BP group revised its bid and won the contract.

Some of the smaller oil fields attracted no bidders, while other bids asked for far more than the amount Baghdad offered per barrel produced.

Iraqi officials say the goal is to boost oil production to about four million barrels of oil a day, which is almost double the current output.

Some Iraqi lawmakers have criticized the pending deals, adding some political uncertainty for investors who already have concerns about security.

Iraq has the world’s third-largest known oil reserves, and the oil fields up for bid hold an estimated 43 billion barrels of crude. This is the first significant chance that foreign oil companies have had to work in Iraq’s oil fields since the industry was nationalized in 1972.

source: voanews