Iraq to open for gasfield bidders

Companies are sought to develop three big untapped projects.

Engineers are seen at the Naher al-Umran gas refinery, in the el-Dir district, some 40 kms north of the southern city of Basra, on July 17, 2009. The trade union representing workers of Iraq's state-owned Southern Oil Company (SOC) threatened to prevent exploitation of one of Iraq's biggest oil fields - Rumaila oil field in southern Iraq - by energy giants BP and CNPC. AFP PHOTO / ESSAM AL-SUDANIShow less

Iraq is talking up its gas export potential and plans to invite 15 foreign companies to bid on contracts to develop three untapped gasfields. Royal Dutch Shell, Total and Korea Gas Corporation (KOGAS) are favoured bidders, said Sabah Abdul Kadhim, the head of the oil ministry's petroleum contracts and licensing directorate.

"We are keen to select international companies with experience with gas and which have gas projects across the world," Mr Kadhim told Reuters. "Shell, Total and KOGAS will be at the top of the list because they have good experience in the gas industry and gas operations worldwide." Others companies would be selected from the 44 that qualified to bid in Iraq's first two post-war auctions of oil and gas licences last year. The new bidding round would be held by the end of this year.

Two of the gasfields, Akkas and Mansuriyah, which hold estimated reserves of 2.1 trillion cubic feet and 3.3 trillion cu ft respectively, were included in the previous auctions but failed to attract bids acceptable to Baghdad. A consortium led by Italy's Edison was the sole bidder for Akkas, which is in western Iraq near its border with Syria. Mansuriyah, in northern Iraq, received no bids. Iraq had earlier planned to develop the third field, Siba, by itself. The gasfield in south-eastern Iraq, near the country's border with Iran, is smaller than the other two but has more than 100 billion cu ft of estimated reserves.

Despite its previous lack of progress in developing the fields and its plans to shore up the country's inadequate power system with new gas-fired generating plants, Iraq is also keen to develop gas exports. The country might produce enough gas to export 2.4 billion cu ft per day by 2016, Iraq's deputy oil minister Ahmed al Shamma said in Turkmenistan on Tuesday. Iraq and Turkmenistan, which respectively hold the world's 12th and fourth-largest proved gas reserves, have been tipped as potential suppliers to the proposed Nabucco pipeline, which would deliver up to 3 billion cu ft per day of Central Asian and Middle East gas to Europe through Turkey, skirting Russia.

Mr al Shamma said Iraq was considering "associated gas" produced from oilfields near Akkas for export to Europe: "It will go to Turkey. From there, where it is connected is something to decide. Turkey is our natural route." The ministry had no plans for gas exports from the semi-autonomous Kurdish region in the north-east of Iraq, Mr al Shamma said. But OMV, the Austrian oil group that leads the Nabucco consortium, has already paid US$350 million (Dh1.28 billion) for a 10 per cent stake in a Kurdistan gas venture controlled by the Sharjah affiliates Crescent Petroleum and Dana Gas. Hungary's MOL also acquired 10 per cent of that project last year for shares.