Peter Wells writes:
“With the successful conclusion of the First Bid Round, the Ministry of Oil will have achieved the timely, open, clean and transparent award of several major oil field development projects to reputable and capable operating companies – ExxonMobil, ENI and BP – on very advantageous terms for Iraq. The three projects awarded to date alone represent capital investment of more than $50bn and incremental production capacity by 2017 of at least 2-2.5mn b/d. The state take on the revenues from these projects will be close to 99%.
The contrast with the KRG is considerable. The KRG’s PSCs have been awarded by opaque, secret negotiations to companies with, in the main, very limited major international field operating experience. The profit sharing terms of the KRG PSC are simplistic by the standards of modern PSCs and yield lower revenues and value to the state than PSCs in comparable countries.”