By Jonathan Stearns and Glen Carey
April 16 (Bloomberg) -- Iraq will open at least six major oil and natural-gas fields for exploration and production in its first licensing round since the U.S.-led invasion in 2003, as the country seeks to raise output without a national energy law.
Iraq, which pre-qualified international oil companies this week for the bidding round, will open the southern Rumaila, West Qurna and Zubair fields for exploration, Oil Minister Hussain al-Shahristani said in an interview in Brussels today. In the north, international oil companies will be invited to develop the Kirkuk oil field and the Akkaz gas field.
``At least six giant fields will be included, including some gas fields,'' al-Shahristani said. ``There will be other bid rounds next year and more companies will be qualified as we go along.''
Iraq aims for a near doubling of oil production to 4 million barrels a day in the coming years with expertise from international companies, many of which have refused to invest in the country because of a lack of security and the government's failure to pass a federal energy law. No legislation has been passed because of disagreements over revenue sharing and oil-field development.
Iraq pre-qualified 35 out of 120 U.S., European and Asian companies that submitted documents between Jan. 9 and Feb. 18 to participate in the licensing round, Iraq's Oil Ministry spokesman Asim Jihad said on April 14.
Pre-Qualifiers
Exxon Mobil Corp., the world's largest oil company, and Europe's two biggest, Royal Dutch Shell Plc and BP Plc, were among the 35, as were ConocoPhillips, Chevron Corp. and Total SA. Others were Russia's OAO Gazprom, the world's largest natural-gas producer, and OAO Lukoil, the Russian oil producer with the most overseas assets. Mitsubishi Corp. and Inpex Holding Inc. of Japan and China's Sinochem Corp. were also accepted.
The southern oil fields up for exploration, including Rumaila North, Rumaila South, West Qurna and Zubair, have a current production capacity of 1.71 million barrels a day and as much as 43 billion barrels in estimated reserves, according to the Web site of the U.S. Energy Information Administration. Kirkuk has a current production capacity of 250,000 barrels a day and reserves of 10 billion barrels.
Lukoil is seeking to revive its contract to West Qurna, which was awarded by the government of the late Saddam Hussein. Iraq has said the Russian company will have to bid again once a new oil law comes into effect.
Iraq produced 2.38 million barrels of oil a day in March, according to data compiled by Bloomberg. The nation has an estimated 115 billion barrels of proven oil reserves, lagging behind only Saudi Arabia and Iran, according to BP figures.
Energy Law
Iraq aims to increase production to 3 million barrels a day by the end of this year and 4.5 million barrels by around 2012, the Brussels-based European Commission said after a meeting between Energy Commissioner Andris Piebalgs and al-Shahristani.
``This should be a favorable contribution towards decreasing oil prices,'' the commission, the 27-nation European Union's executive arm, said in an e-mailed statement today.
Iraqi Prime Minister Nuri al-Maliki, who is visiting Brussels, told the European Parliament's foreign affairs committee today that the government was close to completing an agreement on a much-needed oil and gas law.
This would help with the country's economic development, al-Maliki said without providing more information. He also called for greater energy cooperation with the Europe.
EU Agreement
The EU may reach an energy-partnership accord with Iraq in the coming weeks, said commission President Jose Barroso.
``The negotiations are going on very well, namely on the gas issues, so that we work with our Iraqi partners in some projects of regional importance for the European Union,'' Barroso said at a press conference with al-Maliki. ``It's a matter of some weeks, I believe, to conclude these negotiations.''
The Iraqi government offered to make available to the EU at least 5 billion cubic meters of gas a year from the Akkaz field, the commission said in its statement.
``Iraq made a political gesture of goodwill,'' the commission said, ``and indicated that probably there would be more in the future for the European Union.''
The EU is also seeking deeper ties with Iraq in other areas. Commission talks with the Iraqi government on a broader trade and cooperation agreement are also ``progressing very well,'' Barroso said.
To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.netGlen Carey in Dubai at gcarey8@bloomberg.net
Last Updated: April 16, 2008 12:02 EDT
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