A Shell Stunt

After watching Royal Dutch Shell go for the kill on Majnoon oil field, I’m stunned and I’m sure I’m not the only one. I expected companies to try and undercut each other to win one of the fields offered in the second bid round, before the door of Iraq oil closes again. But I didn’t expect them to go way below the maximum remuneration fee the oil ministry was willing to pay for the development of the giant Majnoon. The obvious question is: would the deal be profitable for Shell at $1.39 per barrel it offered compared to Total’s $1.75?

Consider this: Just for the 10 years when Majnoon would be producing at its peak or plateau production of 1.8 million…

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1st bid round . 2nd bid round . CNPC . Halfaya . oil ministry . plateau production . remuneration fee . results . Rumaila . Shell . Total . west qurna-1 . West Qurna-2 . Zubair The View from Baghdad

2nd Bid Round: The Results – 11 December 2009

- MAJNOON OIL FIELD:

THE BIDDERS:

1. Royal Dutch Shell (60%) – Petronas (40%)

FEE BID: $1.39    PLATEAU: 1,800,000 b/d     SCORE:100

2. Total (57%) – CNPC (43%)

FEE BID $1.75    PLATEAU: 1,405,000 b/d       SCORE: 79

Ministry Max Remuneration Fee: not revealed

Majnoon contract awarded to SHELL

- HALFAYA OIL FIELD:

THE BIDDERS:

1. ONGC (50%) – TPAO (30%) Oil India (20%)

FEE BID: $1.76      PLATEAU: 550,000     SCORE: 82

2. ENI (30%) Sonangol (15%) CNOOC (15%) Kogas (20%) Oxy (20%)

FEE BID $12.90     PLATEAU: 400,000     SCORE 22

3. STATOIL (50%) Lukoil (50%)

FEE BID $1.53       PLATEAU 600,000       SCORE 93

4. CNPC (50%) Petronas (25%) Total (25%)

FEE BID 1.40          PLATEAU 535,000       SCORE…

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2nd bid round . Bid fee . CNOOC . CNPC . East Baghdad . eastern fields . ENI . Halfaya . Kogas . Lukoil . Majnoon . Oil India . ONGC . Oxy . Petronas . plateau production . Qaiyarah . score . Shell . Sonangol . Statoil . Total . TPAO The Forum

Iraq: More Momentum

26 September 2008

Judging by the way preparations are going at the oil ministry in Baghdad, Iraq’s second postwar bid round promises to be even more controversial than the first.

When launched in late June with six producing oil fields and two gas fields, the first offering was slammed by some as selling off the country’s crown jewels. According to plans now being drawn up, Iraqi Oil Minister Hussein al-Shahristani could offer 16 more oil fields to international oil companies as early as October. Critics claim this would effectively place all of Iraq’s oil production in foreign hands.

Discussions are still continuing at the ministry’s headquarters to finalize the list of fields to be offered in the second round. If all preparatory work…

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2nd bid round . CNPC . contracts . gas fields . Gharraf . Halfayah . hydrocarbon law . INOC . Lukoil . Majnoon . Nahr bin Umar . Nassiriyah . NOC . oil fields . operating companies . PSA . Qayarah . SOC . tender . Total . WEst Kifl 2008

Iraq Finalizes Fields to Be Offered in Bid Round Next Week

26 December 2008

Iraq’s oil ministry decided Wednesday to launch its second postwar bid round for oil and gas field development with 14 oil fields and two gas fields spread over Iraq’s regions, ministry sources said Wednesday. The official announcement will be made by Iraqi Oil Minister Hussein al-Shahristani in Baghdad on Dec. 31.

Opinions in the ministry are divided over whether Iraq should launch a new bidding round before the first one has been concluded or has made significant progress. The first licensing round was announced at the end of June and so far the ministry has only published an initial tender protocol and a draft model contract, which were made available to international oil companies that have paid for data…

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2nd bid round . Badrah . East Baghdad . gas fields . Gharraf . Gullabat . Halfaya . Khashm al-Ahmar . Kifl . Lukoil . Majnoon . Merjan . Nahr bin Umar . Najmah . Nassiriyah . Naudoman . oil fields . PSC . Qamar . Qayarah . Siba . Total . WEst Kifl . West Qurna 2008