Iraq throws open door to foreign oil firms

Tag : OUT DOOR

The move to invite bids for the development of Iraq's largestproducing fields should mark the return of the oil majors, whosecash and expertise Iraq needs to restore its oil infrastructurethat has been hard hit by sanctions and war.
But any awards to U.S. and British firms could anger opponents ofthe invasion, who have said the 2003 war was designed to giveWestern oil companies control over Iraqi oil reserves. U.S. andBritish officials have denied the charges.
By allowing international firms to help raise output at its keyproducing oil fields, the Iraqi government is breaking with thepolicy of major oil-producing neighbors such as Saudi Arabia,Kuwait and the United Arab Emirates where national firms keep tightcontrol of foreign investment in their oil sectors.
"The six oilfields that have been announced today are the backboneof Iraq's oil production," Oil Minister Hussain al-Shahristani tolda news conference.
"With its massive proven reserves, Iraq should not stay at itscurrent level of production. Iraq should be the second or thirdlargest oil-producing country."
Shahristani listed the fields as Rumaila, Kirkuk, Zubair, WestQurna Phase 1, Bai Hassan and Maysan -- which comprises threeseparate fields: Bazargan, Abu Gharab and Fakka.
The Oil Ministry said they were open for long-term developmentcontracts. Iraqi has prequalified 41 foreign firms.
Shahristani said he hoped contracts could be signed in June 2009 toraise output by a combined 1.5 million barrels per day at thosefields. He added that Iraq aimed to raise output to 4.5 million bpdby 2013 from the current 2.5 million bpd.
He said any firm that wanted to bid must open an office in Baghdad.Currently, few foreign companies have any presence in Iraq becauseof the security situation.
Julian Lee, senior energy analyst at London's Centre for GlobalEnergy Studies, said Iraq was a bit like Russia in the early to mid1990s.
"No matter how risky you think it is, as an individual company youcan't afford to be the only major international player that isn'tinterested," he said.