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Iraq is inviting international companies to bid for 30 new oil and gas projects in two licensing rounds until January 2024, as OPEC’s second-largest oil producer looks to boost crude production and reduce gas import dependence.
The so-called “fifth plus” and sixth licensing rounds will have lower royalty rates and profit-sharing agreements that are expected to be of less burden to investors, Al-Hakam I. Al-Neama, the head of the exploration contracts division at Iraq’s Oil Ministry, said at the ADIPEC energy conference in Abu Dhabi, as carried by Reuters.
The “fifth plus” licensing round will aim to award 16 projects, including some that weren’t awarded in the fifth round, while the sixth round will award another 14 projects, according to the Iraqi official.
Despite being rich in oil and gas, Iraq has had to import gas from neighboring countries, including Iran, for fuel at its power plants.
Iraq lacks the gas processing plants necessary to process the associated gas extracted from its massive oilfields and continues to flare some of those gas volumes.
Iraq imports gas and electricity from Iran but has had trouble paying for those because of the U.S. sanctions on Iran’s energy sector. The U.S., while endorsing the Iraq-Iran energy deals to keep Iraq supplied with power and gas, has been pushing Baghdad to reduce its reliance on Iranian energy imports.
Last month, Iraq’s Prime Minister Mohammed Shiaa al-Sudani met in New York with representatives of dozens of U.S. energy companies to pitch potential investments in the Iraqi natural gas sector.
“My government is serious about investment in gas and to be an active and powerful player in the gas market,” the Iraqi official told Bloomberg Television in an interview.
Al-Sudani also met with U.S. Secretary of State Antony Blinken on the sidelines of United Nations General Assembly in New York at the end of September.
Secretary Blinken “encouraged the Government of Iraq to continue sustainably developing energy resources and combating climate change and underscored U.S. support for re-opening of the pipeline with Türkiye,” the U.S. Department of State said in a statement on the meeting.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.