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Plans to finalize details of Iraq`s latest oil field licensing round by July will be delayed due to the upcoming elections. a ministry official said Tuesday.
National and provincial elections are scheduled for April and May and this comes at a time when Iraqi politics remains quite fractured.
`The timing may extend a bit especially as the whole project is connected with elections in April and May.` Abdul Mahdy Al-Ameedi. director general of Petroleum Contracts and Licensing Directorate (PCLD) said at the CWC Iraq Petroleum conference in Berlin.
This confirms that attempts to tweak the terms of existing technical service contracts. approve field development sub-contracts and sign new production and exploration deals with the world`s largest oil companies risk coming to a standstill until at least when elections are held.
CONTRACT MODELS
Sources have said progress has been held back by questions over what contract model the government will use.
Ameedi said negotiations with companies are ongoing and that there were still some issues to iron out but he did not go into specific details.
`We are approaching the whole situation and we are going ahead and doing a lot to prepare these licenses.` he said. `Comments have been made by specialists in order to reorder contracts to include all the commitments and provisions I doubt that we will finish by July 5. It will take time but it will be done.`
Previous bidding rounds had specific contract models that covered costs and paid a remuneration fee for production.
However. some oil companies complained that the contract had too low a return on investment and was further marred by delayed payments and contract approvals.
Sources have said this continues to be an issue though ministry officials were working hard with the companies to find common ground. according to Ameedi.
In January. the ministry prequalified 26 companies for a bidding round it set for May 7 and were hoping to get the whole process sorted by July.
The bidding round is for eight fields or exploration blocks on or near the country`s borders with Kuwait and Iran. as well as one exploration block in territorial waters in the Persian Gulf.
Oil Minister Jabbar al-Luaibi said in Vienna in November that the ministry has narrowed down the contract model parameters and will then take proposals from investors within those parameters.
Twenty-one companies that were approved in previous bidding rounds have completed the pre-qualification process for this bidding round. in addition to five new companies: UAE-based Dana Gas and Dragon Oil. Geo-Jade Petroleum of China. US company Schlumberger and Russia`s Zarubezhneft.
