Chinese companies won most of the oil and gas deals in Iraq's energy bidding round launched on Saturday as the Opec member country seeks to strengthen reserves and revenue.
A total of 29 oil and gas projects are available in the latest energy bidding rounds that last three days.
Sixteen fields and exploration blocks were offered as an appendix to the fifth bidding round held in 2018. Then, 11 blocks and fields were offered, but only seven were awarded. The rest are being offered as the sixth bidding round.
Twenty-two energy companies have been pre-qualified to take part.
Out of the 21 projects auctioned on Saturday and Sunday, 10 were awarded to Chinese's companies.
Zhongman Petroleum and Natural Gas Group (ZPEC) won rights to develop the Northern Extension of East Baghdad oil filed. It will be entitled to 6.67 per cent share of the profit.
The bid was less than the one submitted by Iraq KAR company of 12.22 per cent. The field is shared by Baghdad and Salahuddin provinces in central Iraq.
It also took the Middle Euphrates fields in central Iraq, offering 11.67 per cent share of net profit, which was higher than the 9.35 per cent share the oil ministry was willing to pay. Afterward, the company accepted the 9.35 per cent share offered by the ministry.
It is a cluster of three fields – Kifl, West Kifl and Merjan – shared by the provinces of Najaf and Karbala. The fields hold both oil and gas reserves.
China’s UEG was the only company interested in Fao block in the southern province of Basra. The oil ministry accepted its bid of 25.16 per cent of net profit. The block, which is located near the border with Iran and Kuwait, has oil potential.
Zhenhua won the deal to develop Qurnain block south of Iraq. It initially asked for 25 per cent of the net profit, but later accepted the oil ministry’s rate of 17.3 per cent. The filed is shared by the provinces of Najaf and Anbar in southern Iraq.
It also won a bid to develop Abu Khema oilfield in the southern Muthanna province and will get 9.1 per cent of the net profit.
China's Geo-Jade won a bid to develop Zurbatiya block in Wasit province in central Iraq. It initially asked for 12.65 per cent of the net profit, but later accepted the Oil Ministry's offer of 7.65 per cent. The block has oil potential.
Geo-Jade also won rights to develop Jabal Sanam block in Basra province with oil potential. Its share of the net profit is 30.9 per cent.
Iraq's Block 7 was awarded to China's CNOOC with a share in the net profit of 25.88 per cent. The block, which has oil potential, extends across the country's central and southern provinces of Diwaniya, Babil, Najaf, Wasit and Muthanna.
China's Anton Oilfield Services won a bid to develop Iraq's Dhufriya oilfield in the central Wasit province, and Sinopec won a bid to develop Summer block, which has oil potential, in the southern Muthana province. They will get 29.16 per cent and 17.85 per cent of the net profit, respectively.
A bid by Sinopec to develop Adan block with oil potential in Basra was rejected. It asked for 31.67 per cent of the net share, far from the Oil Ministry's set share of 15.8 per cent.
Iraqi KAR company won the rights to develop Dimah oilfield in the southern province of Maysan. It will receive 6.2 per cent of the net profit and was one of seven companies that vied for this field.
Sasan and Alan fields in the northern province of Nineveh were also awarded as one project to Iraqi KAR company. It will be entitled to 17.25 per cent of the net profit. Both fields hold oil and gas reserves.
Number of projects received no bids and companies have until Monday to submit their bids for these projects, Oil Minister Hayan Abdel Ghani said.
These include Anbar, Okashat, Anah and Al Anz blocks with oil and gas potential in Anbar province; Pulkhana field with oil and gas reserves in Salahuddin province; Tel Al Hajar block with oil and gas potential in Nineveh province; Block 11 in Muthana province; and Qalaat Salih block with oil potential in Maysan province.
Iraq Prime Minister Mohammed Shia Al Sudani said his country is committed to “assuring a safe and stable working environment” and to remove “complicated routine and bureaucracy”.
He added that the recent contacts signed with international oil companies will help his country to stop burning natural gas in three to five years from now.
Separately, the country’s Oil Minister Mr Abdel Ghani said the offered projects will boost the country’s oil and gas reserves.
Iraq will soon announce an increase in its proven oil reserves to more than 160 billion barrels from 145.02 billion barrels now, he added.
The objective of the current offering is the award of contracts to qualified companies or consortia of companies to carry out exploration, appraisal, development and production activities in accordance with the terms of the contracts applicable to each of the 29 contract areas.
Winning companies or consortia must enter into either an exploration, development and production contract (EDPC) or a development and production contract (DPC) to carry out such activities.
For certain costs categorised as supplementary costs, the contractor is entitled to recover such costs at an accelerated rate and with interest. Petroleum costs, supplementary costs and remuneration will be paid in export oil unless Iraq elects to pay in cash.
The terms of the contracts vary according to the level of exploration maturity.
The EDPC provides for an exploration period from five to nine years and a development period of 25 years.
The DPC has a development period of 20 years with the potential for a single five-year extension.
Iraq is committed to assuring a safe and stable working environment and to remove complicated routine and bureaucracy
Mohammed Shia Al Sudani,
Iraq Prime Minister
Major deals
As the security situation improved in 2008, the following year, Iraq began to attract IOCs to develop its resources.
Top among major oil companies were the US‘s ExxonMobil, Royal Dutch Shell, the UK’s BP, China’s CNPC and Russia’s Lukoil.
Since then, Iraq has awarded dozens of oil deals to develop major fields that hold more than half of its 145.02 billion barrels of proven reserves. Deals to tap natural gas resources were also awarded.
The country is now producing slightly more than 4 million barrels a day from Baghdad-controlled oilfields, up from nearly 2.4 million a day in 2009, and its daily exports averaged 3.6 million barrels a day in March, according to Oil Ministry figures.
Iraq is Opec’s largest producer behind Saudi Arabia. Oil revenue makes up nearly 95 per cent of the country’s budget.
In recent years, it started focusing on developing vast gas reserves to meet growing demand for electricity, especially during summer.
Iraq buys 1,200 megawatts of electricity and enough natural gas to generate 2,800MW from Iran, making up nearly one third of its needs.
Last year, it signed a deal with French company TotalEnergies to develop oil and gas and renewable energy projects worth $27 billion.
Iraq holds a 30 per cent stake in the joint venture, while 45 per cent is held by TotalEnergies and the remaining 25 per cent by QatarEnergy.
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The specs: 2019 Haval H6
Price, base: Dh69,900
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Seven-speed automatic
Power: 197hp @ 5,500rpm
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Fuel economy, combined: 7.0L / 100km
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Company%20profile
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Sun jukebox
Rufus Thomas, Bear Cat (The Answer to Hound Dog) (1953)
This rip-off of Leiber/Stoller’s early rock stomper brought a lawsuit against Phillips and necessitated Presley’s premature sale to RCA.
Elvis Presley, Mystery Train (1955)
The B-side of Presley’s final single for Sun bops with a drummer-less groove.
Johnny Cash and the Tennessee Two, Folsom Prison Blues (1955)
Originally recorded for Sun, Cash’s signature tune was performed for inmates of the titular prison 13 years later.
Carl Perkins, Blue Suede Shoes (1956)
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Roy Orbison, Ooby Dooby (1956)
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Jerry Lee Lewis, Great Balls of Fire (1957)
Lee’s trademark anthem is one of the era’s best-remembered – and best-selling – songs.
Three tips from La Perle's performers
1 The kind of water athletes drink is important. Gwilym Hooson, a 28-year-old British performer who is currently recovering from knee surgery, found that out when the company was still in Studio City, training for 12 hours a day. “The physio team was like: ‘Why is everyone getting cramps?’ And then they realised we had to add salt and sugar to the water,” he says.
2 A little chocolate is a good thing. “It’s emergency energy,” says Craig Paul Smith, La Perle’s head coach and former Cirque du Soleil performer, gesturing to an almost-empty open box of mini chocolate bars on his desk backstage.
3 Take chances, says Young, who has worked all over the world, including most recently at Dragone’s show in China. “Every time we go out of our comfort zone, we learn a lot about ourselves,” she says.
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'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
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“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
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8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
