Iraq Confirms Oil Contract Award Plan Amid Dissent on Terms
By Anthony DiPaola
June 21 (Bloomberg) -- Iraq’s government affirmed its plan to go ahead with the award of oilfield service contracts later this month amid protest from lawmakers against the terms of the deals that may be offered to foreign companies.
Oil Minister Hussain al-Shahristani will present the government’s plan and expectations for the award of the contacts in an address to parliament on June 23, government spokesman Ali Al-Dabbagh said by phone today.
Iraq, holder of the world’s third-largest oil reserves, is running two bidding rounds for oil and gas development rights after six years of conflict and prior sanctions destroyed the nation’s infrastructure. Iraq will award the first contracts for six oil and two gas fields on June 29 and 30, al-Dabbagh said.
“The oil minister will explain the government’s policy in the bid round,” al-Dabbagh said. “We confirm that the bidding round will carry on as scheduled.”
Some lawmakers have criticized the government on its handling of the nation’s energy resources and failure to boost crude production faster. Auctioning service contracts to international companies will “damage” Iraq’s economy, South Oil Co. head Fayad Nema said in a letter to Shahristani, the Middle East Economic Survey ( http://www.mees.com/
)reported June 19.
South Oil’s plan to develop petroleum assets would have increased production more than the Oil Ministry’s bidding rounds, according to Nema’s June 10 letter written in Arabic and translated and reprinted in English by MEES. Al-Dabbagh declined to comment on the letter.
Reporter on this story: Anthony DiPaola in Dubai
Last Updated: June 21, 2009 08:26 EDT