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Kuwaiti-led oil consortium wins deal on Iraq's oil block
Updated: 2012-05-30 17:27:00
BAGHDAD, May 30 (Xinhua) -- An oil consortium led by Kuwait Energy oil company won Wednesday a deal to explore one of the 12 exploration blocks in southern Iraq in the country's fourth round of energy auction.
The consortium comprised of Kuwait Energy, Turkish TPAO and United Arab Emirates' Oil Dragon after they offered a price of 6. 24 U.S. dollars per barrel of oil equivalent.
They will invest in the 900-Square-km block of oil exploration which is adjacent to the Iraq-Iran border in Iraq's southern province of Basra, some 550 km south of Baghdad.
The Kuwaiti company takes 60 percent of the contract, while the Turkish and the Emirates companies have the remaining 40 percent.
Wednesday's auction started with no bidding by any company or consortium for two blocks with presumed natural gas fields, one was the 8,000-Square-km block located in the desert area between the Iraqi provinces of Nineveh and Anbar in northwestern the country, while another was the 9,000-Square-km block located in the area between Anbar and Najaf provinces in western the country.
However, Asim Jihad told Xinhua that "the two exploration blocks will offered again tomorrow morning as several energy companies could not arrive on time for today's bidding round."
Previously, the Iraqi Oil Ministry approved 47 international energy companies from 25 countries to participate in the two-day fourth round of bidding.
The fourth auction round of licensing is for the international oil and gas companies to develop a number of exploratory blocks that include 12 sites, and the energy firms are to submit their bids on six blocks a day over Wednesday and Thursday.
Later in the day, the ministry will offer the three remaining exploration blocks scheduled for Wednesday bidding by the companies.
Iraq is offering 12 large exploration blocks of thousands square kilometers for bidding, seven of which for gas and five for oil across the country.
The winning companies, or consortia of companies, will carry out exploration, appraisal, development and production activities within the 12 contract areas.
The aim of the fourth round is primarily to expand Iraq's natural gas production capacity to satisfy the power generation sector and create gas-based industries, as well as increase the country's oil reserves.
Since the ministry launched its first licensing round in 2008, Iraq has awarded 14 service contracts for the development of discovered oil and gas fields, in addition to the Ahdeb oil contract in eastern the country.
The ministry also signed a major joint venture deal with a consortium of Royal Dutch Shell and Mitsubishi to capture and monetize associated natural gas produced in southern Iraq.
The country has proven reserves of 112 trillion cubic feet (3. 17 trillion cubic meters) of natural gas, but because of the poor infrastructure of the oil and gas industries, the country is only producing 1.5 billion cubic feet a day.
The country depends on oil revenues for nearly 95 percent of its budget.
In 2010 Iraq announced its proven oil reserves had increased to 143.1 billion barrels rising from the previous estimation of 115 billion barrels.
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Updated: 2012-05-30 17:27:00
BAGHDAD, May 30 (Xinhua) -- An oil consortium led by Kuwait Energy oil company won Wednesday a deal to explore one of the 12 exploration blocks in southern Iraq in the country's fourth round of energy auction.
The consortium comprised of Kuwait Energy, Turkish TPAO and United Arab Emirates' Oil Dragon after they offered a price of 6. 24 U.S. dollars per barrel of oil equivalent.
They will invest in the 900-Square-km block of oil exploration which is adjacent to the Iraq-Iran border in Iraq's southern province of Basra, some 550 km south of Baghdad.
The Kuwaiti company takes 60 percent of the contract, while the Turkish and the Emirates companies have the remaining 40 percent.
Wednesday's auction started with no bidding by any company or consortium for two blocks with presumed natural gas fields, one was the 8,000-Square-km block located in the desert area between the Iraqi provinces of Nineveh and Anbar in northwestern the country, while another was the 9,000-Square-km block located in the area between Anbar and Najaf provinces in western the country.
However, Asim Jihad told Xinhua that "the two exploration blocks will offered again tomorrow morning as several energy companies could not arrive on time for today's bidding round."
Previously, the Iraqi Oil Ministry approved 47 international energy companies from 25 countries to participate in the two-day fourth round of bidding.
The fourth auction round of licensing is for the international oil and gas companies to develop a number of exploratory blocks that include 12 sites, and the energy firms are to submit their bids on six blocks a day over Wednesday and Thursday.
Later in the day, the ministry will offer the three remaining exploration blocks scheduled for Wednesday bidding by the companies.
Iraq is offering 12 large exploration blocks of thousands square kilometers for bidding, seven of which for gas and five for oil across the country.
The winning companies, or consortia of companies, will carry out exploration, appraisal, development and production activities within the 12 contract areas.
The aim of the fourth round is primarily to expand Iraq's natural gas production capacity to satisfy the power generation sector and create gas-based industries, as well as increase the country's oil reserves.
Since the ministry launched its first licensing round in 2008, Iraq has awarded 14 service contracts for the development of discovered oil and gas fields, in addition to the Ahdeb oil contract in eastern the country.
The ministry also signed a major joint venture deal with a consortium of Royal Dutch Shell and Mitsubishi to capture and monetize associated natural gas produced in southern Iraq.
The country has proven reserves of 112 trillion cubic feet (3. 17 trillion cubic meters) of natural gas, but because of the poor infrastructure of the oil and gas industries, the country is only producing 1.5 billion cubic feet a day.
The country depends on oil revenues for nearly 95 percent of its budget.
In 2010 Iraq announced its proven oil reserves had increased to 143.1 billion barrels rising from the previous estimation of 115 billion barrels.
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