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Thu May 31, 2012, 01:01 PM

Iraq Fails to Entice Bidders for Most of 12 Oil and Gas Blocks at Auction

By Kadhim Ajrash and Khalid Al-Ansary - May 31, 2012 10:59 AM ET

Iraq failed to attract partners for most of the 12 oil and natural-gas exploration licenses offered in a two-day auction at which Asian and Russian bidders were more prominent than Western companies.

The Oil Ministry awarded three blocks, two for oil and one for gas, at the auction ceremony in Baghdad. Russia’s OAO Lukoil and Inpex Corp. of Japan won a joint bid to explore for crude in southern Iraq, and Pakistan Petroleum Ltd. won rights to an eastern gas block, Abdul Mahdy Al-Ameedi, the head of the ministry’s licensing department, said today. Kuwait Energy Co. led a group awarded rights to an oil area yesterday.

The licensing comes amid an energy-industry revival that has boosted Iraq into third place among the 12 members of the Organization of Petroleum Exporting Countries, nine years after the U.S.-led invasion that toppled Saddam Hussein. In its three previous bid rounds since 2003, Iraq auctioned rights to produce at oil fields already discovered or in operation, whereas this week’s was for new exploration.

“Bids were won by companies that are already in Iraq,” Stuart Walley, regional manager for consultant Senergy Oil and Gas, said by telephone from Dubai today. “In some cases their existing knowledge could have helped in assessing the potential, prospectively, of oil and gas in the auctioned blocks.”

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http://www.bloomberg.com/news/2012-05-31/iraq-starts-first-auction-of-oil-gas-exploration-rights.html

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