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Two of the Iraqi oilfield contracts up for grabs have failed to be awarded after the consortia bidding for them rejected the terms on offer from Baghdad.
A consortium led by US oil company Conoco-Phillips was the sole bidder for the 2.5 billion barrel Bai Hassan field in southern Iraq, but the Iraq Oil Ministry balked at the US$26.70 for each extra barrel of oil produced the syndicate was asking for. Iraq had offered $4 for every extra barrel.
The Bai Hassan field has reserves of 2.3 billion barrels and current output currently stands at between 140,000-150,000 barrels per day (bpd). Iraq is hoping for increased production to at least 220,000 bpd, an initial fee of $300 million as well as a minimum of $150 million being spent on developing the field.
The Conoco-Phillips led consortium included Chinese oil giants Sinopec and China National Offshore Oil Corp (CNOOC) had intended to increase production at Bai Hassan to 390,00 bpd.
A consortium led by CNOOC and Sinochem was the sole bidder for 2.5 billion barrel Maysan oilfield in northern Iraq, but again demanded a much higher fee than Iraq’s Oil Ministry was willing pay. The consortium wanted $21.40 for each extra barrel of oil produced, while Iraq was offering $2.30.
The Maysan oilfield has a current production of 100,000 bpd, but is expected to produce at least 275,000 when fully developed. The initial fee was $300 million and minimum expenditure on developing the field was set at $200 million.
Bidding process
Day One
Zubair 16:00
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Day Two
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)      Â
Source: IHS Global Insight, Iraqi Oil Ministry, media
