Iraq Watch – Legal Limbo

9 November 2008

In response to the controversy over whether the Iraqi oil ministry has the right to award oil field development contracts under its first bid round, former Oil Minister Thamir Ghadhban argued that the ministry relies on a 1987 law that placed the powers to sign contracts into the hands of the oil minister and on the fact that the 2005 Iraqi constitution does not require the legislature’s vote on the signed contracts. The question is whether this legal and constitutional foundation provides international oil companies with sufficient guarantees that a contract signed by the oil ministry in the absence of a hydrocarbon law, even with the endorsement of the Iraqi cabinet, will have the long term validity and…

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1st bid round . Al-Ahdab . bid rounds . CNPC . contracts . Ghadban . hydrocarbon law . IOCs . Iraq Constitution . Malcolm Brinded . oil ministry . production sharing . Shell . technical service contract . tender protocol . West Qurna 2008

Iraq Watch – Confused Priorities

26 September 2008

A second bid round for Iraq’s upstream sector, currently being prepared by the oil ministry, promises to transform the country’s oil industry. If all goes to plan, a second set of oil and gas fields would be awarded by the end of next year, hard on the heels of the first eight fields announced this summer — and the Iraqi oil industry will be bustling. That’s good news for world oil markets and the global industry in general. Iraq is one of the last oil provinces in the Middle East, or even in the world, with huge untapped reserves.

National operators like North Oil Co. and South Oil Co. would be transformed, having had no foreign partners since nationalization…

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1st bid round . 2nd bid round . contracts . hydrocarbon law . IOCs . legal structure . licensing rounds . nationalization . NOC . oil ministry . SOC 2008

Iraq Watch – The Need for Clarity

17 October 2008

Iraq finally unveiled the terms of its big upstream opening. International oil companies now realize that to win a 20-year service contract to rehabilitate and redevelop some of Iraq’s giant oil fields, they need to offer it high production targets at the lowest cost. For committing to spend money on rehabilitation of infrastructure and drilling of wells as well as a new reassessment of recoverable reserves in each field, something that is long time overdue, they will be paid back their capital investment, their operating cost and a remuneration fee that is linked to a weighted index. Since they can choose to be paid in kind and the long term contract guarantees a minimum lifting of oil, they…

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1st bid round . 2nd bid round . co-operator . field operations . giant fields . IOCs . ministry . MOC . NOC . oil fields . operators . reserves . SOC . target output . upstream 2008

Iraq: Contract Labyrinth

19 December 2008

Iraq’s latest draft model contract for its first postwar bid round, recently made available to participating firms, has failed to bridge the gap between the oil ministry and international oil companies, analysis of the latest text reveals. The two sides may struggle to narrow their differences in the short time frame announced by Baghdad, which aims to publish the final technical service contract by April 2009 and award contracts by the summer.

In a bid to safeguard its sovereignty and refute criticism for offering oil-producing fields on 20-year contracts, the ministry has adopted strict terms for allowing foreign companies to operate the tender’s six producing oil fields. At the same time, it has placed a large number of responsibilities…

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1st bid round . contractor . FOD . gas fields . incremental production . investment . IOC . JMC . model contract . NOC . non-operator . operator . plateau production . producing fields . ROC . service contract . SOC . tender protocol 2008