More than 50 companies to bid for Iraqi oilfield

nassiriyaIraq’s Federal Oil Ministry has announced its plan to auction the Nassiriya oilfield to more than 50 oil companies on 19 December 2013

Abdul Mahdy al-Ameedi, head of the Federal Oil Ministry’s Petroleum Contracts and Licensing Directorate (PCLD), said that 52 oil companies would take part in the bidding round for the integrated project — developing the oilfield and building a 300,000 bpd refinery near the field, located in southern Iraq. 

The ministry has accepted seven oil companies, including France’s Total, to join 45 firms that had already qualified from the previous bidding rounds.

According to the PCLD draft, the new terms for the seven bidders would be different from the service contract awarded to the previous oil firms. The changes included amendments to investor costs and pay per barrel remuneration fee.

The new terms included investors to have a share in project revenues only when production began. The ministry would pay recovery costs from the date of commencement of work, which differed from the previous contract where the costs were paid only when the contractor raised production by 10 per cent.

All investors, however, would have to pay 35 per cent taxes to the federal government on the profit they make from the Nassiriya project.

Ameedi said that Total was allowed to invest in the Nassiriya refinery, but it wouldn’t be allowed to work in the field unless it cancels its projects in the Kurdistan Region of Iraq.

Iraq’s three refineries — Baiji, Daura and Basra — have been producing at 70 per cent of capacity, equivalent to around 560,000 bpd.

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