ERBIL, Kurdistan Region (Kurdistan 24) – Iraq will grant new oil and gas exploration and development contracts in 11 blocks later this month, Iraqi Oil Ministry spokesperson Asim Jihad said on Sunday.
Bids for the new blocks, located in areas along bordering countries Iran and Kuwait, as well as offshore Gulf waters, were expected to begin in June 2018.
According to Jihad, who was quoted by Reuters, bidding documents would be available to oil firms on April 13, with submissions due on April 15, the same day the winners will be announced.
Earlier in the week, head of the Iraqi Oil Ministry’s licensing and contracts office Abdul Mahdi al-Ameedi said the new contracts, expected to be granted to foreign oil companies operating in Iraq, would eliminate production fees awarded by the government to the companies.
Ameedi told Reuters the new contracts include provisions that exclude oil by-products from the foreign companies’ revenues.
Foreign oil producers operating in Iraq currently receive a sum from the government based on production increases, including crude and oil by-products like liquefied petroleum gas and dry gas.
The contract changes are an attempt to prevent an economic crisis such as the one Iraq experienced when oil prices crashed in 2014, affecting Baghdad’s ability to distribute the fees.
BP, Exxon Mobil, Eni, Total, and Royal Dutch Shell, foreign companies who are currently working in Iraq, have contributed to increased production in the last 10 years by over 2.5 million barrels of oil per day (bpd) to about 4.7 bpd, Reuters said.
The new developments will not affect the Kurdistan Regional Government who produces oil and gas from fields under its administration and implements its own production sharing model with foreign companies.