Trade Arabia – Iraq plans to invite international oil companies to help develop its giant oilfields before the end of this year, Oil Minister Hussain Al Shahristani said.
‘These are major projects, giant oilfields,’ Shahristani said on his arrival in Kuwait.
Iraq, home to the world’s third biggest oil reserves, which are estimated at 115 billion barrels, needs up to $20 billion in foreign investment to boost production.
But multinationals have been waiting for a new investment law, expected to be approved later this year, and for security to improve.
Asked if oil majors are slated to take part in big oil projects in Iraq, Shahristani said: ‘Yes, definitely. It’s going to be public tendering. We’ll declare which oilfields will go first and then the oil company is free to apply.’
The minister was asked when the tendering process would start.
‘Before the end of this year. We have to decide on the types of contracts that we will be interested in.’
Shahristani repeated that Iraq is now exporting up to 1.9 million barrels per day (bpd) of crude oil, its highest level since the war, after the army took over security of the vital northern pipeline to the port of Ceyhan in Turkey.
State marketer Somo this month issued three sell tenders of Kirkuk crude after nearly a year-long halt due to repeated sabotage. Somo aims to secure long term supply deals as it maintains the flow of Kirkuk.
‘Iraq is currently producing about 2.5 million barrels a day and exporting 1.8 to 1.9 million barrels. It will all be sold by contracts, long-term contracts,’ said Shahristani, visiting Kuwait as part of an Iraqi delegation headed by Prime Minister Nuri Al Maliki.
‘The basic norm of selling Iraqi oil is long-term contracts from the north and the south,’ he added.
‘We only started two or three spot sales from Ceyhan port because we had problems pumping through the pipeline and now that we have fixed it and we are pumping normally, we will be selling it in long-term contracts.’
‘We have already invited oil companies to declare their requirements; just before we left (Iraq) a couple of days ago,’ the minister said.
The sabotage-plagued northern line had been mostly idle since the invasion and Iraq had been relying almost solely on southern exports of Basra Light crude.
Decades of wars, sanctions and underinvestment have left Iraq struggling to boost oil production, which had been stuck since the 2003 US-led invasion at some two million bpd, with exports of 1.5 million bpd. This compared with pre-war output of just under three million bpd and exports of around two million.