Sunday, October 5, 2008

Iraq Moves Ahead With 2nd Part Of Its Oil Plan

Some of Iraq’s oil fields that are going to be opened up to foreign companies. The government's schedule listed on the bottom right was scrapped in September 2008 because of a lack of interest by major oil firms.

As Iraq failed at one part of its oil plan, it is now moving ahead with the other half. As reported earlier, in September 2008 Iraqi’s Oil Ministry scrapped the first part of its oil plan, which was to offer Technical Service Agreements. These were consulting jobs where major oil companies were to give advice on existing fields to help with their production. The international corporations were never happy with the deals, which led the Oil Ministry to end the plans. The Petroleum Intelligence Weekly reported that Baghdad is now moving forward with the second half of its program, which is to open up oil fields for long-term production contracts. There will be two rounds of bidding for oil fields that have up to 91 billion barrels of Iraq’s 115 barrels of known reserves. Companies that win will enter into joint ventures with either the North Oil Company or the South Oil Company, both run by the Iraqi government. Iraq will control 51% of the corporation in each case. The contracts will last at least 20 years. The first round covers nine fields mostly in northern Iraq that have 43.421 billion barrels of reserves. The list of fields in the second round is not set yet, but preliminary reports say that it will cover fourteen fields in both northern and southern Iraq with 53.262 billion barrels of reserves.

The Oil Ministry’s plans could run into two major problems. First, Iraq has not passed a new hydrocarbon law to regulate oil contracts. That will mean the government will have to rely upon old Saddam era legislation to sign the new contracts. Second, the bidding includes fields that could lead to conflicts with the Kurds. The first list includes the disputed city of Kirkuk, while the second includes four fields in northern Diyala. All five areas the Kurds wish to annex. The Kurds and Baghdad have an on-going dispute over control of Iraq’s oil and territory. This move by the Oil Ministry could intensify this conflict, as Prime Minister Nouri al-Maliki wants central control of the country, while the Kurds are pushing for autonomy.

Proposed Iraqi Oil Fields Up For Bids

First Round

North Rumalia 10,280 billion barrels of reserves
South Rumalia 7,487 billion barrels of reserves
Kirkuk 7,980 billion barrels of reserves
West Quma – 1 8,584 billion barrels of reserves
Zubair 4,080 billion barrels of reserves
Bai Hassan 2,397 billion barrels of reserves
Buzurgan – Maysan 612 million barrels of reserves
Fauqa – Maysan 1,547 billion barrels of reserves
Abu Ghraib 454 million barrels of reserves
Total: 43,421 billion barrels of reserves

Second Round

West Quma – 2 12,876 billion barrels of reserves
Mainoon 12,580 billion barrels of reserves
Nahr bin Umar 6,532 billion barrels of reserves
Nasiriyah 4,357 billion barrels of reserves
Halfay 4,098 billion barrels of reserves
East Baghdad 8,108 billion barrels of reserves
Gharraf 863 million barrels of reserves
Qayara 807 million barrels of reserves
Nur 557 million barrels of reserves
West Kifl 209 million barrels of reserves
Wamar 73 million barrels of reserves
Gullabat 98 million barrels of reserves
Naudoman 104 million barrels of reserves
Total: 51,262 million barrels of reserves


International Crisis Group, “Iraq After The Surge II: The Need for a New Political Strategy,” 4/30/08

Petroleum Intelligence Weekly, “Terms Take Shape For Iraqi Bid Rounds,” 10/6/08

Visser, Reidar, “Two Very Different Takes on Centralism,”, 9/20/08

No comments:

This Day In Iraqi History - Nov 29 PM Abdul Mahdi resigned under pressure from Ayatollah Sistani over killing protesters

  1914 Gen Barrett and Sir Percy Cox asked that UK occupation of Basra be announced as permanent believing it would sway...