Category: oil contracts

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IOCs scramble to analyze new Contract Model

Iraq is giving international oil companies (IOCs) just two weeks to evaluate a new contract model that will serve as the basis of an upcoming bidding round for 11 oil exploration and development projects.

The Oil Ministry has set April 15 as the deadline for companies to submit bids, according to Abdul Mahdy al-Ameedi, director general of the Petroleum Contracts and Licensing Directorate (PCLD), who presided over a briefing for IOCs at the ministry Thursday to outline the contract model and bidding process.

More here from Iraq Oil Report (subscription required).

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Majnoon Development Plan — Important Move in the Right Direction

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Developing Majnoon Oilfield by National Effort — Important Move in the Right Direction

On 21st December, the Ministry of Oil (MoO) approved a set of measures relating to the development of the super giant Majnoon oilfield after Shell relingushed it back to Iraq

In addition to my emphatic strong and absolute support for the Ministry of Oil on this action regarding Majnoon oilfield, I find it timely to highlight some related basic issues that MoO and other authorities, especially the Council of Ministers and the Parliament, should pay attention to and take the necessary action on them.

Please click here to download the full report.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

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Iraq’s Fifth Licensing Round

By Alessandro Bacci.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Ministry of Oil has repeatedly said that it would like to renegotiate the terms of its service contracts with the international oil companies (IOCs) to link the fees the companies receive for developing the fields to the oil prices and to have them share the burden when oil prices decrease.

However, discussions between the federal government and the IOCs have been going on for the past two years with no tangible results until now. Companies affirm that they have submitted some recommendations, but then the process has not moved on.

At this point, it seems that to have a successful fifth licensing round, the federal government must produce in the coming months a new model contract (or at least an amended version of the present technical service contracts) capable of satisfying according to different price levels both the government and the IOCs.

Otherwise, it’s difficult for Iraq to reach the production target of 6 million bpd of crude oil by 2020, especially if other neighboring countries might soon offer better contractual terms.

Please click here to download the full report.

Alessandro Bacci is an independent energy consultant in relation to business strategy and corporate diplomacy (policy, government, and public affairs). Much of his activity is linked to the MENA region, an area where he lived for four years. Alessandro is now based in London, United Kingdom (www.alessandrobacci.com). A multilingual professional, Alessandro holds a Bachelor of Laws and Master of Laws from the University of Florence (Italy), a Master in Public Affairs from Sciences Po (France), and a Master in Public Policy from the Lee Kuan Yew School of Public Policy (Singapore).    

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Iraq’s Fifth Licensing Round

By Alessandro Bacci.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Ministry of Oil has repeatedly said that it would like to renegotiate the terms of its service contracts with the international oil companies (IOCs) to link the fees the companies receive for developing the fields to the oil prices and to have them share the burden when oil prices decrease.

However, discussions between the federal government and the IOCs have been going on for the past two years with no tangible results until now. Companies affirm that they have submitted some recommendations, but then the process has not moved on.

At this point, it seems that to have a successful fifth licensing round, the federal government must produce in the coming months a new model contract (or at least an amended version of the present technical service contracts) capable of satisfying according to different price levels both the government and the IOCs.

Otherwise, it’s difficult for Iraq to reach the production target of 6 million bpd of crude oil by 2020, especially if other neighboring countries might soon offer better contractual terms.

Please click here to download the full report.

Alessandro Bacci is an independent energy consultant in relation to business strategy and corporate diplomacy (policy, government, and public affairs). Much of his activity is linked to the MENA region, an area where he lived for four years. Alessandro is now based in London, United Kingdom (www.alessandrobacci.com). A multilingual professional, Alessandro holds a Bachelor of Laws and Master of Laws from the University of Florence (Italy), a Master in Public Affairs from Sciences Po (France), and a Master in Public Policy from the Lee Kuan Yew School of Public Policy (Singapore).    

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Baghdad denies Russian Claims regarding KRG Oil Deals

By John Lee.

The Iraqi Ministry of Oil has denied reports that Russian Energy Minister Alexander Novak discussed Russian oil companies’ operations in Iraqi Kurdistan with the Iraqi prime minister or oil minister during his trip to Iraq.

Novak had been quoted as saying that Baghdad had no problems with Russian companies doing business with the Kurdistan Regional Government (KRG).

Baghdad reasserted that while it welcomes foreign investment in the country, “oil is a sovereign resource and therefore all contracts … must be signed with the federal government and the Ministry of Oil.”

(Sources: Reuters, Rudaw)

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New Oil & Gas Blocks to be offered

By John Lee.

Iraq has invited international oil companies (IOCs) to bid for contracts to explore and develop nine new oil and gas blocks.

The blocks are along the borders with Iran and Kuwait, with one located in the territorial waters.

According to Reuters, the bidding terms will be finalised by the end of May, with bids to be opened on 21st June 21, 2018.

The terms are expected to be different from previous service contracts, which remunerate companies regardless of oil prices fluctuations.

(Sources: Ministry of Oil, Reuters)

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BP, Eni “interested in Majnoon Oilfield”

By John Lee.

Reuters has reported that both BP and Eni have expressed an interest in developing the giant Majnoon oilfield, which Shell plans to exit next year.

Iraqi oil officials told the news agency that Iraq’s Ministry of Oil has not yet started negotiations with either company.

BP is currently developing the Rumaila field, while Eni operates Zubair.

Shell is expected to hand over Majnoon operations to the state-owned Basra Oil Company by the end of June 2018.

Both Chevron and Total have been previously reported as being interested in taking over the field.

(Source: Reuters)

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Baghdad hits back at Rosneft/KRG Deal

By John Lee.

Iraq’s Ministry of Oil has hit back at Rosneft‘s recent decision to enter a production-sharing deal with the Kurdistan Regional Government (KRG) without its approval.

In a statement, the Ministry warned:

“The ministry of oil warns seriously all the countries and oil companies from contracting or dealing with any authority inside Iraq without taking the approval from the federal government and the ministry of oil”.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] (pictured) added:

“… irresponsible statements from some of the officials inside & outside Iraq or the foreign companies about their intention to sign oil contracts with any authority inside the geographic borders of Iraq without telling the federal government or the ministry of oil, is considered as a Blatant interference in the internal affairs and a derogation from national sovereignty, and an outright violation of international norms.”

Rosneft boss Igor Sechin insisted that the company strictly followed the law. AFP quotes him as saying:

“If there are problems between the government of Iraq and Kurdistan they need to solve the problems themselves … I am not a politician, my job is to produce oil.”

In addition to the production-sharing deal, Rosneft has just agreed to start work on a new oil pipeline project in Iraqi Kurdistan.

(Sources: Iraqi Ministry of Oil, AFP)