Iraq to outlines service contracts to international companies in London

BAGHDAD/IraqiNews.com: Iraq’s oil ministry on Sunday it will hold a conference in London to provide foreign oil and gas companies with details of the contracts under which it hopes the companies will help boost the country’s oil output . “A delegation led by Iraq’s oil minister Hussain al-Shahristani will present prequalified companies at a meeting in London on Monday with geological data on the fields, as well as details on the financial terms of the contracts and the process for applying,” oil ministry spokesman Assem Jihad told IraqiNews.com. Royal Dutch Shell and British petroleum BP were among the companies that helped appraise the fields. The contracts on offer are service contracts, which mean the winners will be paid a flat fee to produce the oil rather than receive an equity stake in the fields or any share of profits. “Thirty-five companies, shortlisted out of 120, including most of the big international oil companies, have qualified to bid,” Jihad noted. “Oil executives agreed that no decisions were likely to be made on Monday”, the spokesman added. While the improved security climate in Iraq is easing one main deterrent to investment in Iraq, oil companies generally do not like service contracts as these cap their gains. The oil fields open for long-term development contracts are Rumaila, Kirkuk, Zubair, West Qurna Phase 1, Bai Hassan and the Missan fields. Missan comprises three fields, Bazargan, Abu Gharab and Fakka. Two gas fields, Akkas and al-Mansuriyah, are also open. Earlier, Iraq’s oil ministry said it wants to sign the deals by mid-2009. AM(S) 1