BAGHDAD (AFP) – Iraq awarded three gas fields at an international auction on Wednesday as it vies to become a major world player in a policy the oil minister said is key to boosting the war-ravaged economy.
The largest of the three fields up for sale went to a Kazakh and Korean consortium; the next biggest to a Turkish-Kuwaiti-Korean bid; and the smallest to a Turkish-Kuwaiti joint venture.
The Korean Gas Corporation of South Korea and Kazakhstan’s KazMunaiGaz secured a 50-50 joint venture to develop the largest field — Akkaz, in Anbar province west of Baghdad — which has reserves of about 158 billion cubic metres (5.6 trillion cubic feet).
The winning bid offered 5.50 dollars per oil-barrel-equivalent and a plateau production of 11.4 million cubic metres (400 million cubic feet) per day over 13 years.
The only other bidders for Akkaz were France’s Total and Turkey’s TPAO, which placed a 50-50 joint venture bid.
A consortium made up of Turkey’s TPAO, Kuwait Energy and Korean Gas Corporation won the contract to develop the Mansuriyah field in Diyala province, northeast of Baghdad, which has estimated reserves of 127 billion cubic metres (4.5 trillion cubic feet).
They offered seven dollars per oil-barrel-equivalent and a production plateau of 9.1 million cubic metres (320 million cubic feet) per day over 13 years.
TPAO has a 50 percent stake in the joint venture, Kuwait Energy 30 percent and Korean Gas Corporation 20 percent.
They were the only bidders.
Siba, the smallest field up for auction with reserves of 34 billion cubic metres (1.5 trillion cubic feet) according to Oil Minister Hussein al-Shahristani, went to a joint venture between Kuwait Energy and Turkey’s TPAO.
The two firms, which have a 60-40 split in the joint venture, offered a nine-year contract at 7.5 dollars per oil-barrel-equivalent and a per-day production plateau of 2.9 million cubic metres (100 million cubic feet).
KazMunaiGaz was the only other bidder for Siba, which lies in southern Basra province.
The oil minister said that development of the three fields, which have combined estimated reserves of nearly 317 billion cubic metres (11 trillion cubic feet), would help jumpstart the economy by creating jobs and providing much-needed electricity.
Oil and gas contracts are “very important and we hope they will help in creating jobs and providing electricity,” Shahristani said.
Iraq needs the energy revenues to cut down on unemployment — running at 28 percent, according to the United Nations — and provide much-needed electricity to end routine power rationing.
French oil giant Total, Japan’s Mitsubishi and competitors from Russia, South Korea, Turkey and India were among 13 companies eligible to bid in the auction which has twice been postponed and which analysts had warned could prove a hard sell for Iraq.
Of the three gas fields awarded, two in particular — Akkaz and Mansuriyah — lie in provinces in which insurgent violence has run high and neither received any bid in a previous auction round on June 30.
Iraq, which this month upped its figure for proven oil reserves by nearly a quarter to 143.1 billion barrels — one of the world’s largest — has been hoping the auction will do for its gas fields what similar auctions last year did for its oil industry.
In two bid rounds, foreign firms snapped up contracts to develop 10 oilfields, which Baghdad is tapping in an ambitious bid to eventually raise crude output from the current 2.4 million barrels per day to between 10 and 12 million bpd — more even than oil heavyweight Saudi Arabia.
The eligible bidders on Wednesday were: Italy’s Eni and Edison; France’s Total; Japan’s Jogmec, Mitsubishi and Itochu; Korean Gas Corporation of South Korea; Turkey’s TPAO; Kazakhstan’s KazMunaiGaz; Russia’s TNK-BP; India’s Oil & Natural Gas Corporation (ONGC); Kuwait Energy; and Norwegian giant Statoil.