Iraq Said to Seek Bids for First-Half Gasoline, Diesel Supply

Iraq is seeking gasoline and diesel for delivery in the first half of 2012 to help meet domestic demand, three people involved in the transaction said.

The Persian Gulf oil producer asked potential sellers to submit bids tomorrow for 1.3 million metric tons of gasoline from January through June, the people said. They asked not to be identified as the negotiations are confidential. Officials from the Iraq’s State Oil Marketing Organization didn’t return calls for comment when contacted by Bloomberg News.

Iraq, like other Persian Gulf crude producers and exporters, imports products such as motor fuel because it lacks sufficient refining capacity. The country is trying to rebuild its oil industry after years of conflict and limited investment reduced output and efficiency.

The state oil marketer is also seeking almost 800,000 tons of diesel with a sulfur content of 500 parts per million, one of the people said.

Iraq reissued the gasoline tender with different specifications after initial bids at premiums over regional benchmarks ranging from the high $50s to $70 were too high, the people said. The tender is seeking the same quantity of fuel as the state purchased for the second half this year.

The State Oil Marketing Organization has also re-tendered for supply during the second half after initially seeking to buy 95 RON grade gasoline.

The company re-issued that tender for supply of lower quality 92 RON fuel after price quotes it received for the better fuel were too high, the people said in June. Iraq is seeking 92 RON fuel in this bid round, the people said.

Trafigura Beheer BV, Glencore International AG, Vitol Group Gunvor Group Ltd. and Litasco SA, the wholly owned trading unit of Russia’s OAO Lukoil, were energy trading companies awarded contracts to sell fuel to Iraq during the second half of this year, four people involved in those negotiations said in June.

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