KIRKUK, Aug 13, 2009 (AFP) - The head of Iraq's state-owned North Oil CompanyNorth Oil Company (NOCNOC) expects the next auction to develop the country's oil and gas fields to be a success, provided would-be foreign investors rein in their "greed".
Iraq's first tender offer in four decades last June -- which saw investors snub all but one of the eight contracts put up for auction -- failed because "foreign investors were a little bit greedy", Manaa al-Obaydi told AFP earlier this week.
"I think the Iraqi government put up a price, which may or may not have been fair, but the bidders came with a price that is four times as much," Obaydi said.
"It's okay if it was twice or one and a half times as much, but not four times," he said.
"I think the second round will be more successful," he added.
British energy giant BPBP and China's CNPC International Ltd were the only companies to win a bid in the last round of offers, accepting two dollars per barrel to work jointly in the giant Rumaila oil field in southern Iraq, which has known reserves of 17.7 billion barrels.
A slew of foreign firms rejected as too low other contracts offered by Baghdad, all of which were based on companies accepting a fixed fee -- also mostly around two dollars -- per barrel of oil or oil equilavent extracted, rather than an equity stake.
In the next round, scheduled for November, 15 oil fields wrapped into 10 contracts will be offered to 45 qualified bidding companies.
The oil ministryoil ministry is planning a road show in the Turkish city of Istanbul on August 25 to promote investor-interest.
"We want (foreign companies) to come so that we will learn, so we are open," Obaydi said.
"I would not ask them to accept my price, but at least I want them to be fair with me."
Obaydi stood by the ministry's decision to deny foreign companies equity stakes in local fields, saying Iraqi oil companies should run the show while foreign firms focus on providing expertise in order to provide employment for Iraq.
NOCNOC currently produces 650,000 barrels per day (bpd), still below the 750,000 bpd produced before the 2003 US-led invasion that toppled dictator Saddam Hussein.
Obaydi said NOCNOC expects to raise oil production by around 75,000 bpd in the oil-rich province of Kirkuk by the end of next year thanks to increased investment in production facilities.
Baghdad is investing around 150 million dollars to ramp up output at the Bai Hassan oil field in the disputed province in northern Iraq, which is the site of a tussle for control between Baghdad and the autonomous Kurdistan Regional Government (KRG).
The money would help install new equipment that would increase production from the current daily average of around 173,000 bpd to as much as 230,000 bpd by the end of next year, he said.
Improvements already made at the Jambur field will see production there increase from 52,000 to 70,000 bpd, while the region's biggest field, Kirkuk, is set for an as-yet unspecified rise from a current 382,000 bpd.
Iraq has the third-largest proven reserves of oil in the world, behind Saudi Arabia and Iran, but large-scale exploration and development has not occurred in the country for decades.
The nationalisation of the country's energy companies in the early 1970s, followed by decades of war and UN-led sanctions during Saddam's rule -- as well as chaos after his overthrow -- curtailed the industry.
Iraq currently produces around 2.4 million bpd, with oil accounting for around 85 percent of the government's revenues. It exports some two million bpd, most of it from the fields of the southern province of Basra.
Insurgent attacks and tensions between Baghdad and the KRG have cast a pall over efforts to develop oil and gas in the country's north, especially at the contested Khurmala dome, part of the massive Kirkuk field.
Observers fear tensions in the disputed region could be a trigger for further conflict.
Obaydi said a move earlier this year by Kurdish peshmerga militia to bar NOCNOC employees from working on the Kirkuk fields was a "misunderstanding" that had been resolved.
Disputes between Baghdad and the Kurds over Kirkuk would not disturb continued oil extraction in the region, Obaydi maintained.
"Whatever solution comes from Baghdad and Arbil, at the end of the day NOCNOC will continue to take care of the oil," he said.
psr/aub/jfb
Copyright AFP 2009.
http://www.zawya.com/story.cfm/sidAN...3T082219ZSBH52
Iraq's first tender offer in four decades last June -- which saw investors snub all but one of the eight contracts put up for auction -- failed because "foreign investors were a little bit greedy", Manaa al-Obaydi told AFP earlier this week.
"I think the Iraqi government put up a price, which may or may not have been fair, but the bidders came with a price that is four times as much," Obaydi said.
"It's okay if it was twice or one and a half times as much, but not four times," he said.
"I think the second round will be more successful," he added.
British energy giant BPBP and China's CNPC International Ltd were the only companies to win a bid in the last round of offers, accepting two dollars per barrel to work jointly in the giant Rumaila oil field in southern Iraq, which has known reserves of 17.7 billion barrels.
A slew of foreign firms rejected as too low other contracts offered by Baghdad, all of which were based on companies accepting a fixed fee -- also mostly around two dollars -- per barrel of oil or oil equilavent extracted, rather than an equity stake.
In the next round, scheduled for November, 15 oil fields wrapped into 10 contracts will be offered to 45 qualified bidding companies.
The oil ministryoil ministry is planning a road show in the Turkish city of Istanbul on August 25 to promote investor-interest.
"We want (foreign companies) to come so that we will learn, so we are open," Obaydi said.
"I would not ask them to accept my price, but at least I want them to be fair with me."
Obaydi stood by the ministry's decision to deny foreign companies equity stakes in local fields, saying Iraqi oil companies should run the show while foreign firms focus on providing expertise in order to provide employment for Iraq.
NOCNOC currently produces 650,000 barrels per day (bpd), still below the 750,000 bpd produced before the 2003 US-led invasion that toppled dictator Saddam Hussein.
Obaydi said NOCNOC expects to raise oil production by around 75,000 bpd in the oil-rich province of Kirkuk by the end of next year thanks to increased investment in production facilities.
Baghdad is investing around 150 million dollars to ramp up output at the Bai Hassan oil field in the disputed province in northern Iraq, which is the site of a tussle for control between Baghdad and the autonomous Kurdistan Regional Government (KRG).
The money would help install new equipment that would increase production from the current daily average of around 173,000 bpd to as much as 230,000 bpd by the end of next year, he said.
Improvements already made at the Jambur field will see production there increase from 52,000 to 70,000 bpd, while the region's biggest field, Kirkuk, is set for an as-yet unspecified rise from a current 382,000 bpd.
Iraq has the third-largest proven reserves of oil in the world, behind Saudi Arabia and Iran, but large-scale exploration and development has not occurred in the country for decades.
The nationalisation of the country's energy companies in the early 1970s, followed by decades of war and UN-led sanctions during Saddam's rule -- as well as chaos after his overthrow -- curtailed the industry.
Iraq currently produces around 2.4 million bpd, with oil accounting for around 85 percent of the government's revenues. It exports some two million bpd, most of it from the fields of the southern province of Basra.
Insurgent attacks and tensions between Baghdad and the KRG have cast a pall over efforts to develop oil and gas in the country's north, especially at the contested Khurmala dome, part of the massive Kirkuk field.
Observers fear tensions in the disputed region could be a trigger for further conflict.
Obaydi said a move earlier this year by Kurdish peshmerga militia to bar NOCNOC employees from working on the Kirkuk fields was a "misunderstanding" that had been resolved.
Disputes between Baghdad and the Kurds over Kirkuk would not disturb continued oil extraction in the region, Obaydi maintained.
"Whatever solution comes from Baghdad and Arbil, at the end of the day NOCNOC will continue to take care of the oil," he said.
psr/aub/jfb
Copyright AFP 2009.http://www.zawya.com/story.cfm/sidAN...3T082219ZSBH52