Iraq’s Oil Ministry extends bid deadline for building Mosul refinery

ERBIL (Kurdistan 24) – The Iraqi Federal Government has extended its deadline for foreign investors and companies to bid on the construction and operation of a new refinery in the northern province of Nineveh, the Oil Ministry said on Sunday.

The new refinery would have the capacity to produce 100,000 oil barrels per day (bpd).

According to the ministry’s statement, bidding documents provide for two investment models, which are build-own-operate (BOO) and build-operate-transfer (BOOT).

Documents for the bidding process will be available from now until May 15, and the bidding will close on June 14, the ministry announced.

Ten days ago, Baghdad postponed its oil and gas bidding round for 11 new blocks, until April 25. Just last year, the Islamic State (IS) still controlled territory in the country’s north and caused significant damage to Iraq’s oil infrastructure.  

The Iraqi Federal Government had planned to award oil and gas exploration and development contracts for the new blocks located on the Iran and Kuwait borders as well as Gulf waters, offshore.

“The bidding process was rescheduled to be on April 25. It is just to give the companies a little bit more time to submit the bid bonds and be prepared for the bidding,” Abdul Mahdi al-Ameedi, head of the Iraqi Oil Ministry’s licensing and contracts office, previously told Reuters.

Iraq, the second-largest oil producer in OPEC after Saudi Arabia, decided to change the contract frameworks with foreign oil companies following a glut caused oil prices to crash in 2014, affecting the ability of the Iraqi government to afford such payments.

Over the past decade, many oil companies such as Exxon Mobil, BP, Total, Eni, Lukoil, and Royal Dutch Shell, assisted Iraq in boosting its output by 2.5 million bpd to almost 4.7 million bpd.

Baghdad, in its new contracts, will also push companies to put an end to gas flaring from oilfields in the coming years.

The central Iraqi government aims to stop gas flaring by the end of 2021, which amounts to almost $2.5 billion in lost revenue for Baghdad, a sum that could fulfill most of the needs for the gas-based power generation, according to the World Bank.

According to Iraqi’s monthly report of March, the country exported 107,050,000 barrels generating $6,435,210,000.

Editing by Nadia Riva