by Keith Richmond
Iraq’s oil minister, Hussain al-Shahristani, said this week that he expects “good, competitive offers” from the world’s biggest energy companies when the second round of bidding begins next month for contracts to exploit his country’s huge oil and gas reserves.
The first auction, in June, flopped. Although 35 firms – including BP, Shell, ExxonMobil, Occidental, the Russian giant Gazprom, the Malaysian company Petronas, the French firm Total and the China National Petroleum Corporation – were involved in bidding, only one contract was taken up after most companies rejected the terms on offer. BP and CNPC agreed to run the 17 billion barrel Rumaila field after Exxon Mobil turned it down.
Iraq has vast oil and gas reserves – it ranks third in the world after Saudi Arabia and Iran – but war with Iran, economic sanctions against the regime of Saddam Hussein and then the American-led invasion and occupation of the country has seen production fall to 2.5 million barrels a day, more than a million below peak production in the late 1970s.
Baghdad wants to increase production to four million barrels a day and use the revenue to help rebuild the country.
