Iraq have sent shockwaves through the world’s biggest publicly owned oil companies by demanding nearly US $2.5 billion more than previously agreed to win the contracts for some of the country’s biggest oilfields, according to a government document obtained by the news gathering agency Reuters this week.
Any international oil company (IOC) interested in bidding for a work contract for six oilfields and two gas fields will have to pay the extra money, which Reuters calculated as almost 16 times more than the $164 million that was initially demanded.
“That was the biggest shock in the document. It really came out of the blue and was a big slap in the face,” Reuters quotes one oil worker at one of the bidding IOCs as saying.
Reuters also reported that the winning bid for Iraq’s largest oilfield, Rumaila, is a staggering $500 million. The country was initially asking for $55 million.
One reason for the price hike may be that the IOCs are being offered a higher stake in the joint ventures. Arabianoilandgas.com reported last month that a new revised model contract was being sent out to IOCs which upped their stake from 49% to 75%.
The Iraqi Oil Ministry plans award to contracts that would mean companies with successful bids receive renumeration in kind for each produced barrel as well as cost fees. IOCs prefer a contract that offers both profit shares and the ability to book reserves.
Oilfields
Numbers in US$ millions
Bai Hassan
New bonus: 300 Previous bonus: 13.5
Kirkuk              Â
New: 400 Previous: 26
Â
Maysan Fields*Â Â Â Â Â Â
New: 300 Previous: 15
Rumaila             Â
New: 500 Previous: 55
West Qurna, Phase 1Â Â
New: 400 Previous: 18.5
Zubair              Â
New: 300 Previous: 16
Gas fields
Akkas     Â
New: 200 Previous: 10
Mansuriyah          Â
New: 200 Previous: 10
Total new: 2,600
Total previous: 164
 *Maysan comprises three fields — Bazargan, Abu Gharab and
Fakka in southern Maysan province
Source Reuters
