A British Petroleum-led group in harness with China’s National Petroleum Corporation was the only bidder to secure a contract to develop Iraq’s oil output in a televised auction.
Six oilfields and and two gas fields were available in the first big tender in Iraq since the 2003 US led invasion. BP and CNPC agreed to run the Rumaila field after Exxon Mobil pulled out because the two dollar a barrel renumeration fee was too small. Iraq has the world’s third largest proven oil reserves at 115 billion barrels. The Iraq oil ministry wants to increase oil production from 2.4 million barrels a day to more than four million barrels daily in the next five years. That adds up to 1.7 trillion dollars of oil revenue over 20 years – 30 billion of it going to the oil companies. Dependent on oil for more than 95 per cent of state income, Iraq needs money to rebuild after six years of bloodshed. It also needs the capital and expertise that foreign firms can bring to repair damage to its oil infrastructure caused by decades of war, sanctions and neglect. Some of the bidders have submitted revised bids that were not made public and those bids are being presented to the Iraqi cabinet for further consideration.