Iraq to open key oil fields
Contract bidding open to 35 foreign companies
Iraq's oil minister, Hussain al-Shahristani, speaking at a news conference here, said Iraq would begin taking bids later this year for longer-term contracts on six of its oil fields. Thirty-five foreign firms have qualified to participate. Winners would be announced in 2009, Shahristani said.
Iraq aims to almost double its production from the current 2.5 million barrels of oil a day to 4.5 million over the next five years, Shahristani said. The contracts — both short and long term — are aimed at helping the country do that.
Iraq had been expected on Monday to issue its first contracts to foreign oil companies that would provide technical support and help raise Iraqi oil production ahead of awarding lucrative long-tern contracts.
Those initial short-term contracts with Exxon Mobil, Shell, Total, BP and Chevron, are still under negotiation, a person close to the talks said, and will probably be completed in the next month.
Chevron said in a statement that it was "continuing to negotiate" with the Ministry of Oil on the short-term technical contract on an oil field called West Qurna, which is currently producing.
"The ministry has separately announced a tender for full field development and Chevron has been pre-qualified to participate in that bid round," the company said.
Shahristani defended the way Iraq has handled the oil contracts, which have raised criticism in the Arab world and elsewhere, where suspicions run rampant that the U.S.-led invasion was at least partly about access to Iraq's oil.
The initial contracts are expected to be awarded without competitive bidding, but Shahristani told the news conference "there will be no privilege for any of those companies to participate in future contracts."
A major legal question hangs over the process: Iraq has yet to pass an oil law that proportions oil revenue among all parts of the country.
Iraq has some of the largest oil reserves on earth, but they are largely untapped because the country has long lacked the resources to develop them. The companies will provide equipment and expertise to refurbish the country's aging infrastructure.
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Iraq has been very slowly getting their oil production back. It won...
Finally | July 1, 2008 at 9:02 a.m.
