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A leading Middle East oil analyst has said that despite the transparent way in which Iraq is awarding oil contracts to foreign oil companies, criticism remains within the Iraq oil industry.
Samuel Ciszuk, energy analyst for the Middle East for HIS Global Insight said that although the live television auction for Iraq’s oil contracts might strike a chord with the wider population, leading government officials are still unhappy about the way the whole situation has been handled politically.
“The criticism against allowing IOCs to invest in Iraq has not been met by the transparency initiative, as it has centred on the government’s right to shut parliament out of the oil and gas policies and contracts,” ” Ciszuk said.
“In the absence of a national oil law, Iraq is still using the pre-2003-war oil law, under which the parliament had to ratify all oil contracts, something the cabinet says it now has sufficient authority to do itself, as the new post-war constitution in any case is incompatible with the old oil law,” he added.
Ciszuk also said that leading figures from within the oil industry in Iraq do not think that oil companies from abroad should have been welcomed into the country as keenly as they have.
“Criticism has also proven widespread in the Iraqi national oil industry, with high officials as well as mid-level engineers, speaking out against Iraq’s perceived need to bring in foreign companies to its producing fields in order to rehabilitate them and raise production,” Ciszuk said.
“The criticism has not stopped even after the government abandoned attempts last year to offer production-sharing agreements in the first licensing round, in favour of technical service contracts (TSCs) with some investment incentives.”
“To a certain extent the criticism builds on decades of staunch resource-nationalistic policies and rhetoric in Iraq and a fear that the pre-nationalisation situation, where IOCs keep most of the profits for themselves, would be repeated,” Ciszuk added.
The live television auction for the Iraqi oil contracts starts this morning at 09.00am local time.
Initial bidding and award ceremony schedule
Day One
Rumaila 09:00 (local time), Mansuriya 11:00, Bai Hassan 14:00, Zubair 16:00
Day Two
Missan Fields 09:00, Kirkuk 11:00, Akkas 14:00, West Qurna-1 16:00
Full list of Iraq oil contract bidders
BHP Billiton, Eni, LUKoil, Occidental Petroleum, Sinochem, BP, ExxonMobil, Maersk Oil, ONGC, Sinopec, Chevron, Hess Corp., Marathon, PT Pertamina, StatoilHydro, CNOOC, INPEX Corp., Mitsubishi, Petronas, Total, CNPC, JAPEX, Nexen, Repsol-YPF, Turkish Petroleum Corp. (TPAO), ConocoPhillips, Gazprom Neft, Nippon Oil, Shell, Woodside Petroleum, Edison, Korea Gas Corp. (KOGAS)
Source: IHS Global Insight, Iraqi Oil Ministry, media
