Re-issued: contracts for Iraqi fields
Baghdad rejigs model contracts
The Iraqi Oil Ministry has sent out a revised copy of a model contract for the eight oil and gas fields included in its landmark first bidding round, in an effort to make sure it hands out contracts to international oil companies by the end of June.
"We had sent out to bidding companies on19 March a semi-final version of the model contract," Abdul Mahdy al-Ameedi, deputy director general at Iraq's Petroleum Contracts & Licensing Directorate (PCDL) told Dow Jones Newswires.
International oil companies have to send their comments on the new model contract by 1 April and the PCLD will issue its final model servicing contract and resend it to them between 15 April and 17 April, he said.
"Companies would have two and half months to study the final model contract and submit their offers by the end of June this year," he said, adding that contracts would be awarded by the end of June.
The PCLD has made several changes to the original model contract which was first issued in November last year, Ameedi said.
The most important change the directorate had made to the original model contract was that oil companies would have a 75% stake in the joint ventures with state-owned Iraqi operators at the fields holding the rest.
That is up from 49% to 51% equity stake initially proposed.
The ministry is planning to award service contracts which mean that winning companies would receive remuneration in kind for each produced barrel as well as cost fees.
The initial model contract stated companies should bid on the cost per barrel of maintaining the same output over 20 years, and the cost per barrel of raising output.
Oil companies would recover their costs from oil they pump above the baseline.
The producing oilfields in question are Kirkuk and Bai Hassan in northern Iraq, West Qurna-1, North and South Rumaila, Zubair and Missan in southern Iraq.
The two non-producing gas fields are Akkas in western Iraq and Mansouriya in the centre of the country.
Baghdad hopes contracts for the fields will help boost the country's crude production capacity to 4.5 million barrels per day by 2012 from 2.4 million bpd now.
Meanwhile, China’s BGP, a unit of China Natural Petroleum Corporation, started the first seismic survey in the country for six years for Al-Waha Petroleum.
The area is located about 180 kilometres south-east of Baghdad.