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Iraq has not seen much success in its attempt to auction off 12 oil and natural gas exploration licenses.
According to Bloomberg, the oil ministry gave out two oil and one gas block at the bidding round in Baghdad. Russia’s Lukoil and Japan’s Inpex Corp. formed a joint offering for the oil blocks in southern Iraq, and Pakistan Petroleum Ltd. snagged ownership of an eastern gas block.
Stuart Walley told Bloomberg that all of the bids in the round were from companies that were already present in Iraq, which could have given them an advantage in accessing block potential.
Bloomberg stated that the lack of bidding on new exploration projects was largely due to the high per-barrel fee that companies would experience under the service contracts on offer.
Samuel Ciszuk, a consultant at KBC Energy Economics in Walton-on-Thames, U.K., told Bloomberg that even though the terms were “fundamentally unsuitable”, he was shocked at the low turnout.
Even with the disappointing bid round, Iraq is already planning for its fifth auction. Oil Minister Abdul Kareem al-Luaibi informed Bloomber that Iraq has over 60 blocks in place for the next round.