VIENNA, (Reuters) – Iraq is not conducting negotiations yet with major oil companies on new oilfield developments, although they wait keenly in the wings, Iraqi Oil Minister Hussain al-Shahristani said on Thursday.
He said that Baghdad was waiting first for its new oil sector law to pass through parliament.
“We are not negotiating with any major oil companies for the time being, we are waiting for the hydrocarbons law to be enacted by the parliament,” Shahristani said.
He repeated that the law was likely to be passed before the end of May. Iraq plans to tender for major oil projects in the second half of the year, he added.
“Meanwhile almost all the major oil companies have indicated interest to come and work in Iraq, we have MOUs with almost all of them,” the minister added.
“They are preparing themselves but there is no negotiation about the development of any particular field,” he said.
Memorandums of Understanding have been in place for several years with majors, who have expressed their interest in specific fields.
The new law will create the Iraq National Oil Company (INOC) which will be responsible for prized oilfields that are already discovered and producing.
These oilfields, such as West Qurna, Majnoon and Bin Umar are coveted by the majors.
Under Saddam Hussein a Russian consortium headed by LUKOIL had signed a deal to develop West Qurna, although that was cancelled by Iraq in 2002.
Iraq is also reviewing a deal to develop the Al-Ahdab field that had been signed with the China National Petroleum Corp and China’s state arms manufacturer Norinco.
France’s Total has initialled deals for Majnoon and Bin Umar.
Shahristani said production sharing contracts, favoured by majors, had not been proposed yet as an investment model.
“We are not discussing that form of contract yet,” he said.
Production sharing deals are not favoured by producing countries keen to maintain as much control as possible over their energy assets.
“The law has left this (the investment model) open for INOC to decide what is the best for the interests of Iraq for the development of any field,” he said, speaking before the start of an OPEC meeting.