Oil Firms Approve Changes to Oilfield Deals: Iraq
(Reuters)
2 January 2010
BAGHDAD — Global oil firms negotiating multi-billion-dollar oilfield deals with Iraq have agreed to legal and technical changes to their contracts, the Iraqi government said on Thursday.
“The ministry discussed the amendments with the companies yesterday and all the winning companies from the first and second rounds have agreed to the changes,” an Oil Ministry official said in a statement from the national media centre.
The statement said the cabinet would vote on the amended contracts — which already have been initialled by the firms — next week.
Once approved, the deals will mark a milestone for Iraq as it seeks to transform its moribund oil sector and catapult itself to major producer status. Iraq has the world’s third largest oil reserves but is only the 11th largest producer.
The deals include some of the nation’s biggest fields, including the Majnoon and West Qurna fields, each of which contain reserves of more than 5 billion barrels.
Nine deals for fields offered in two bidding rounds must still be finalised, including with major energy firms like Exxon Mobil, Royal Dutch Shell
and Lukoil.
In the last two weeks, Iraq has signed initial agreements for seven of the nine pending deals. In a statement issued on its website on Wednesday, the cabinet said the changes to the draft contracts included “legal, operational, administrative and sovereignty issues.”
“They will advance the interests of Iraq and harmonise (the contracts) with Iraqi laws and legislation. They will not damage investor interests, and reaching a model contract will help the companies comply with the principles of justice, transparency and objectivity,” the statement said. Ali Al Alaq, secretary-general of the cabinet, said one of the proposed changes would give the Oil Ministry the right to impose ceilings on oil production based on size of fields. The national media centre statement said another change would subject companies to customs fees.
Only one oilfield deal Iraq awarded in two auctions this year has been finalised, a development contract for the Rumaila oilfield won by China’s CNPC and Britain’s BP.
(Reuters)
2 January 2010
BAGHDAD — Global oil firms negotiating multi-billion-dollar oilfield deals with Iraq have agreed to legal and technical changes to their contracts, the Iraqi government said on Thursday.
“The ministry discussed the amendments with the companies yesterday and all the winning companies from the first and second rounds have agreed to the changes,” an Oil Ministry official said in a statement from the national media centre.
The statement said the cabinet would vote on the amended contracts — which already have been initialled by the firms — next week.
Once approved, the deals will mark a milestone for Iraq as it seeks to transform its moribund oil sector and catapult itself to major producer status. Iraq has the world’s third largest oil reserves but is only the 11th largest producer.
The deals include some of the nation’s biggest fields, including the Majnoon and West Qurna fields, each of which contain reserves of more than 5 billion barrels.
Nine deals for fields offered in two bidding rounds must still be finalised, including with major energy firms like Exxon Mobil, Royal Dutch Shell
and Lukoil.
In the last two weeks, Iraq has signed initial agreements for seven of the nine pending deals. In a statement issued on its website on Wednesday, the cabinet said the changes to the draft contracts included “legal, operational, administrative and sovereignty issues.”
“They will advance the interests of Iraq and harmonise (the contracts) with Iraqi laws and legislation. They will not damage investor interests, and reaching a model contract will help the companies comply with the principles of justice, transparency and objectivity,” the statement said. Ali Al Alaq, secretary-general of the cabinet, said one of the proposed changes would give the Oil Ministry the right to impose ceilings on oil production based on size of fields. The national media centre statement said another change would subject companies to customs fees.
Only one oilfield deal Iraq awarded in two auctions this year has been finalised, a development contract for the Rumaila oilfield won by China’s CNPC and Britain’s BP.