Iraq to Give 82% of Proven Oil Reserves to International Oil Companies

Iraq’s Oil Ministry Oct. 13 will not only take a major step forward to bringing foreign oil companies into Iraq’s nationalized oil sector. Beyond beginning a bidding process for a handful of key oil and gas fields, the ministry will outline a second group of oil and gas fields up for grabs by International Oil Companies. Petroleum Intelligence Weekly reports the two rounds account for 94 billion barrels of Iraq’s 115 billion barrels of proven reserves.

PIW also has more, including:

- Service contracts will allow companies to book reserves

- Fields in northern areas, Diyala and Kirkuk provinces, could spark rows with the Kurdistan Regional Government

- Winners will have “lowest fees;” will pay a signing bonus based on field’s potential and taxes; pay to the IOC will be “linked to an internal rate of return, with 18 percent considered “acceptable” to Baghdad.”

- Development will mandate a Joint Venture with a state-owned oil company, though what the state will get out of that, and what control it will have, is still unknown.

Premier Oil, the U.K. explorer, has been replaced by state-owned Turkiye Petrolleri AO in the list of prequalified companies bidding for oil contracts in Iraq, Bloomberg reports. “Premier Oil is out because it is too small,” Iraq’s Oil Ministry spokesman Asim Jihad said today by phone from Baghdad. “The Turkish government company is now in the bidding round, and there are a total of 35 companies.”

The official didn’t say why Premier was excluded from the company shortlist, Hassan Hafidh reports for Dow Jones Newswires. Separately, an independent source close to the ministry said Premier was excluded because it was involved through another company in oil deals signed by the Kurdistan Regional Government, or KRG, with international oil firms.