Oil companies reject Iraq's terms

Source: BBC

Oil companies reject Iraq's terms
Iraqi oil contract auction

14:34 GMT, Tuesday, 30 June 2009 15:34 UK

Only one of the bidders for the eight contracts to run oil and gas fields in Iraq has accepted oil ministry terms.

Six oil fields and two gas fields were available in a televised auction that was the first big oil tender in Iraq since the invasion of 2003.

BP and China's CNPC agreed to run the 17 billion barrel Rumaila field after Exxon Mobil turned it down.

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Read more: http://news.bbc.co.uk/2/hi/business/8125731.stm

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(article goes on to explain how auction works, but not in four paragraphs. BBC loves their short paragraphs).

Actually NYT may be better:

July 1, 2009
Iraq Begins Major Oil and Gas Auction
By CAMPBELL ROBERTSON and ALISSA J. RUBIN

BAGHDAD — After a year in preparation, a much-heralded auction of licenses to develop Iraq’s huge oil reserves began Tuesday but seemed to run into difficulties when oil and gas companies demanded far more remuneration than the authorities were ready to pay.

Symbolically, the sale, broadcast on television, coincided with the formal handover by American forces of security arrangements in urban areas to Iraqi forces — an economic counterpoint to the striving for political military independence underpinning the Iraqi takeover of patrolling Iraq’s restive cities.

At the auction, each contender offered a sealed bid containing details of how much oil the developing company would produce and how much it expected to be paid for each barrel of oil produced.

The auction has been billed as one of huge economic importance to Iraq, whose oil fields have been closed to foreigners for decades since they were nationalized. Iraq is seeking to increase its oil production after six years of war.

But, according to reporters watching the auction, the first round of bidding for the vast Rumaila field — the biggest on offer — stalled when Exxon Mobil and a consortium of BP and the China National Petroleum Corp. both wanted to earn more than the government’s offer of $2 for each barrel above a guaranteed minimum production level. Exxon said it would produce 3.1 million barrels daily with each additional barrel at a fee of $4.80, news reports said. The BP consortium said it would produce 2.85 million barrels a day and wanted $3.99 for each additional barrel.

...

http://www.nytimes.com/2009/07/01/business/global/01iraqoil.html?_r=1&pagewanted=print

Reuters says they are resubmitting bids, lots of maneuvering.

http://search.us.reuters.com/query/?q=iraq%20oil&s=US&searchWhere=NEWS

http://www.reuters.com/article/businessNews/idUSTRE55T1NW20090630

And notes this:

The sale was billed as the first chance since Iraq nationalized its oil in 1972 for major foreign companies to gain an interest in the world's third largest reserves, much of which are untapped, but many Iraqi critics said it was a bad bargain.

Turkey moves on Kurdish oil fields
Published: June 30, 2009 at 10:33 AM

Turkey's Dogan Enerji acquired a stake in two companies formed to develop oil fields in the northern Kurdish regions of Iraq.

The $80 million investment with Swiss and U.A.E. institutional investors will work to explore and develop oil fields in Erbil and Khalakan in the northern Kurdish provinces of Iraq.

Erbil fields are scheduled to start pumping oil in 2010, with test drilling slated for Khalakan soon after.

The Kurdistan Regional Government in Iraq began oil exports from its Taq Taq and Tawke oil fields beginning June 1, depositing the revenue in federal coffers.

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http://www.upi.com/Energy_Resources/2009/06/30/Turkey-moves-on-Kurdish-oil-fields/UPI-57381246372388/

Freed them to bow to his oil buddies.

until the greedy evil bastards get what they want so they can overcharge all of us anyways?

3.99 to 4.80 would be a decent return on investment

They get subsidies, (18 billion+)and a free rein in controlling the market price by reducing flow of refined gas and diesel. In other words, 'free racketeering'!

before I would make any deals with the Iraqi government. Who knows how long they are going to last once they're on their own.

To produce their fields. They can farm out the expertise to service companies themself and cut out the middle man.

I'm not familiar with Oil production, oil markets or oil revenue, and at least I'm honest enough to admit that.

However, this history of oil companies exploits around the world gives us good reason to be suspicious and skeptical.

.