Shell, Total, Petronas, CNPC buy Iraqi oilfields

Workers at Fakka oilfield, near Amara (Photo: Reuters)

story by RFI - Radio France Internationale

Oil consortiums headed by Anglo-Dutch giant Shell and China's CNPC won contracts to exploit key Iraqi oilfields in an auction in Baghdad Friday. Prime Minister Nuri al-Maliki contrasted the televised sale to the deals in "darkened rooms" under deposed President Saddam Hussein.

"The second round represents a new era in the history of the Iraqi oil industry," Maliki said, as the two-day auction took place in Oil Ministry offices under tight security.

Among 44 companies involved are France's Total, Britain's BP, the US's ExxonMobil and Chevron and Anglo-DutchShell. Asian nations, including China, India and Malaysia are also present - a sign of their growing energy-hunger.

Bidding for Friday has finished with security concerns meaning that the auction did not sell as much as the government hoped. Five more fields will be on the block on Saturday.
So far decided are:

China's CNPC, Petronas and Total won the largest field, Halfaya, hoping to produce 535,000 barrels per day (bpd) at 1.4 dollars (0.95 euros) a barrel;

Shell and Malaysia's Petronas won the Majnon field, hoping to produce 1.8 million bpd for a fee of 1.39 dollars (0.94 euros) per barrel;

No bids for Baghdad East oilfield and a group of fields known as the Eastern Fields, leaving the government running them;

A bid for Qairiyah oilfield from Angola's Sonangol was turned down, because it wanted 12.5 dollars (8.5 euros) per barrel while the government offered five dollars (three euros).

Five more oilfields are due to be auctioned Saturday.

In a first round of bidding in June only one deal was reached - with BP and CNPC - because oil companies claimed the government was offering too low a rate of return. Two other consortiums have agreed to the terms since and signed agreements.

Iraq has the world's third-largest known oil reserves, after Saudi Arabia and Iran. At present it produces 2.5 million barrels per day.

Baghdad wants to reach seven million bpd within six years and is aiming for ten to 12 million in the longer term.

The law which opened Iraq's oilfields to international bids sparked international and local opposition, prompting a first draft to be thrown out by parliament.