Exxon culled from Iraq field auction bidders list
US supermajor removed for KRG oil deals, Japanese firms dominate
Iraq’s Oil Ministry has released its official list of approved bidders for the fourth round of auctions for Iraqi oil fields – and ExxonMobil isn’t on it.
Exxon enraged officials in Baghdad by signing oil deals with the Kurdish regional government, which is running an oil industry on radically different terms in parallel with that managed by the central government. The move has triggered fractious exchanges between politicians in Erbil and Baghdad, after fleeting intial hopes that Exxon's entry would force the regularisation of Iraq's oil and gas sector.
The measure is throught to be the most Baghdad could practically do to punish Exxon for entering into oil deals with the KRG. Vague threats of stripping the US supermajor of its current field development contract at West Qurna 1 evaporated after it became clear Baghdad had no clear legal means of doing so.
Exxon has a record of protecting its interests with international arbitration, and protracted legal proceedings against the world's largest energy company would be anathema to an oil industry which has at times struggled to secure inward investment due to security and logistical difficulties and an insistence on low-magin contracts.
47 companies have been approved, and include UAE investment fund Mubadala and Dragon Oil, a rapidly expanding oil explorer majority-controlled by Dubai’s ENOC.
Syrian General Oil Company is also on the list, having been approved despite being subject to stringent international sanctions that would could make operating in Iraq difficult.
“We are happy to announce that the next bid round is on schedule. The Final Tender Protocol and the definitive model Contract have been issued to all prequalified companies” said Abdul Mahdy Al-Ameedi, director general of the PCLD, said in a press statement.
Iraq is offering 12 large exploration blocks of an average size of 6,500 square kilometers for bidding. Winning companies, or consortia of companies, will carry out exploration, appraisal, development and production activities within the 12 Contract Areas, said the PCLD statement.
The aim of the fourth round is primarily to expand Iraq’s natural gas production capacity to satisfy the power generation sector and create gas-based industries, as well as increase the country’s oil reserves.
“We are looking forward to welcoming all participating companies in Baghdad. The fourth licensing round will be conducted in a transparent and public manner and according to the same procedures as the first three rounds,” Al-Ameedi said.