• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 8 hours Adsorbent natural gas tanks are revolutionary.
  • 3 hours Visualizing How Much Oil Is In An Electric Vehicle (Hint: a heckuva lot)
  • 9 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 1 hour Total nonsense in climate debate
  • 7 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 11 hours IMO2020 To scrub or not to scrub
  • 5 hours Theresa May to Step Down
  • 24 hours Look at the LONGER TERM bigger picture of international oil & gas. Ignore temporary hiccups.
  • 16 hours IMO 2020 could create fierce competition for scarce water resources
  • 6 mins Some Good News on Climate Change Maybe
  • 1 day IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 1 day Apple Boycott in China
  • 4 hours BBC: Proposal to spend 25% of EU budget on climate change
  • 20 hours Why is Strait of Hormuz the World's Most Important Oil Artery
How Trump And Xi Killed The Oil Rally

How Trump And Xi Killed The Oil Rally

The U.S.-China trade war appears…

Iraq Backtracks On Oilfield Auction As Prices Doom Budget

Oil pipelines

The Iraqi authorities are postponing bidding on 12 oil fields, back-tracking on an October auction announcement, and indicating that plans to change production contracts will be reviewed again.

In October, the Iraqi Oil Ministry suggested that there would be a shift from the traditional service contracts for large Iraqi oil fields—largely due to depressed oil prices and the government’s inability to balance its budget while paying a fixed price per barrel of produced oil.

At the same time, the Ministry announced an auction for 12 oil fields in three provinces—Basra, Misan and Central.

According to the Ministry, as of Thursday, 10 November, contractual terms will now be reviewed again.

“[The] Ministry of Oil announces that there are essential changes in the previous announcement, where some of the fields mentioned in the said announcement will be developed by the national efforts of [the] Ministry of Oil, in addition to new fields [that] will be added to this project,” a Ministry announcement read. “Therefore, [the] Ministry of Oil will iterate its announcement of this project by mid-2017.”

The postponement is of an action that had already pre-qualified 19 bidders from over 10 countries. The deal at that time was that the bidders would be able to negotiate new contract terms.

The big picture here is that Iraq is struggling to make ends meet while funding a war against the Islamic State (ISIS). The current service contracts the country has with large oil players developing fields in the south—the key oil area in Iraq—are too expensive. From the Iraqi government’s point of view, these contracts are forcing the state to foot the bill in the form of repaying development costs to oil companies while oil prices are persistently low.

As of yet, there is no indication of what new contract models may entail in the run-up to the government’s plans to announce the new auction date by the middle of next year.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News