Iraq is moving towards attracting major oil investments

Iraq is close to attract billions of dollars needed to modernize the oil sector; however, international oil companies are not yet ready to commit to the huge amounts required. Iraq owns the third-largest oil reserves in the world and its production from reservoirs is among the cheapest anywhere in the world and the country is in dire need of investment after years of sanctions and war. The temptation is growing because the profitable oilfields in the Middle East are far from reach for foreign investors anyway. An oil official said last year that the oil sector in Iraq needs up to $75 billion. American officials say that the main reason for foreign oil companies to avoid working in Iraq is non-issue of the oil law, and unimproved security, for Iraq is still considered a dangerous country.

Iraqi government had approved an oil bill a year ago, but differences with Kurdistan Regional Government and objections from and Shiite and Sunni politicians postponed its issue; however, the Iraqi Oil Ministry is looking for ways of participation of foreign companies and brings some investments and needed technology. In response, more than 70 companies registered by last Monday, in order to compete in the bidding for oil exploration contracts and oil services that the Government intends to put forward in April. Iraq will declare the names of companies eligible to participate in the bidding next month.

According to analysts and executives in some companies, the contracts are likely to be for a fixed fee for two or three years to reform and expand facilities and fields that are already productive.

Iraq did not mention the fields and conditions put in bids and the contracts will be consider as temporary until the oil law is issued, but that will not provide the long-term participation which big oil companies are eager to. However, giant foreign firms such as B.B, konoco Phillips, Repsol and Royal Dutch Shell said they had applied their papers before the expiration of the time limit. These contracts may not be what those giant firms want, but they have registered to ensure their participation in the game when giant oil field contracts in Iraq are put for bids.

source:Iraq Directory