IRAQ/FILE: U.S. oil giant Exxon Mobil dropped from final list for the next round of energy bidding in Iraq due to its deal with the semi-autonomous Kurdish north

Record ID: 344176

  • Title: IRAQ/FILE: U.S. oil giant Exxon Mobil dropped from final list for the next round of energy bidding in Iraq due to its deal with the semi-autonomous Kurdish north
  • Date: 21st April 2012
  • Summary: BASRA, IRAQ (APRIL 20 2012) (REUTERS FOR AGENCY POOL) ***AUDIO AS INCOMING*** SIGN ON BUILDING READING "SOUTH OIL COMPANY" HEAD OF SOUTH OIL COMPANY DHIYA JAFFAR SITTING WITH JOURNALISTS (SOUNDBITE) (Arabic) HEAD OF SOUTH OIL COMPANY, DHIYA JAFFAR, SAYING: "It (Exxon Mobil) has given guarantees to the Iraqi government that it will freeze these contracts (with Iraq's Kurdistan) until the resolve of problems with Kurdistan region, therefore Exxon Mobil is still working on its contract on West Qurna oilfield, but it was disqualified from the fourth bidding round because it did not resolve this issue. If it had resolved this issue with the central government of Iraq and the government of Kurdistan Region, it would have been able to take part, especially that there is a one-month chance from now." JAFFAR WITH JOURNALISTS (SOUNDBITE) (Arabic) HEAD OF SOUTH OIL COMPANY DHIYA JAFFAR, SAYING: "In general, we expect Basra's oil production to be increased from 2.15 million barrels per day to 2.75 million barrels a day God willing, which is our ambition by the end of this year." CAMERAMEN (SOUNDBITE) (Arabic) HEAD OF SOUTH OIL COMPANY, DHIYA JAFFAR, SAYING: "Today we achieved an important step of modernising and expanding storage and export system in the southern region, and this vital step is represented by completing the second floating Single Point Mooring (SPM) platform. Iraqi government represented by South Oil Company has now the capacity to export from two new floating platforms. The additional achieved export capacity of the new floating platform is 900,000 barrels per day, and this means that we have now a total export capacity of 3.5 million barrels per day."
  • Embargoed: 6th May 2012 13:00
  • Keywords:
  • Location: Iraq
  • Country: Iraq
  • Topics: Business,International Relations,Politics,Energy
  • Reuters ID: LVA7QBMRF7SQW9Q5Z2MPD4F5VHSA
  • Story Text: U.S. oil major Exxon Mobil did not make the final list of 47 pre-qualified bidders for the next round of Iraq energy exploration rights because it had signed a deal with the semi-autonomous Kurdish north, an Iraq oil official said on Friday (April 20).
    Exxon, the world's largest publicly traded energy company, was still on the list in early February but has since been removed, while Syrian General Oil has been added as a pre-qualified bidder, the oil ministry said on its website.
    "It (Exxon Mobil) has given guarantees to the Iraqi government that it will freeze these contracts (with Iraq's Kurdistan) until the resolve of problems with Kurdistan region, therefore Exxon Mobil is still working on its contract on West Qurna oilfield, but it was disqualified from the fourth bidding round because it did not resolve this issue," Dhiya Jaffar, head of Iraq's South Oil Company told reporters. "If it had resolved this issue with the central government of Iraq and the government of Kurdistan Region, it would have been able to take part, especially that there is a one-month chance from now."
    Baghdad was infuriated last October when the Kurdistan Regional Government (KRG) announced that Exxon had signed up for six KRG exploration blocks. The central government considers such deals illegal.
    The KRG and Baghdad have had long-running disputes over political autonomy, oil rights and contested territories, and tensions have risen recently after a clash over oil exports.
    Last year Iraq's Oil Ministry excluded U.S.-based Hess Corp from competing in the auction after it had signed deals with the KRG.
    Iraq's fourth round of bidding has been repeatedly delayed but is now due to be held May 30-31. It covers 12 new exploration blocks, which are expected to add 29 trillion cubic feet of gas and 10 billion barrels of oil to Iraqi reserves.
    Iraq improved the terms of the blocks in February after several prospective bidders complained that the deals were unattractive.
    The forthcoming auction will focus mainly on gas exploration rights, and the blocks are mostly in remote parts of western and central Iraq, making them riskier investments since the sites are harder to protect against insurgent attacks.
    Companies will be able to extract gas discovered in the blocks immediately, but the Iraqi government has retained the option to prevent companies from extracting oil in exchange for paying them compensation.
    Exxon could not be reached for immediate comment.
    The company has a large and growing portfolio of conventional and unconventional gas assets around the world, many in less challenging environments than Iraq.
    Moreover, Jaffar said production from Iraq's southern oilfields is expected to reach 2.75 million barrels per day (bpd) by the end of the year, with output at the country's biggest field Rumaila seen increasing by 250,000 bpd.
    Iraq's oil and gas fields have suffered from decades of neglect because of war and economic sanctions. However Iraq is expected to be the world's biggest source of new oil supplies over the next few years and aims to double its output over the next three years.
    Jaffar said output from Rumaila, worked on by BP, was currently at 1.316 million barrels per day while production from West Qurna One was at 406,000 bpd and at 254,000 bpd at Zubair.
    "In general, we expect Basra's oil production to be increased from 2.15 million barrels per day to 2.75 million barrels a day God willing, which is our ambition by the end of this year," said Jaffar, adding that Iraq will be ready to begin loading oil from a second new floating Single Point Mooring (SPM) platform on Friday in the latest move to boost exports.
    "Today we achieved an important step of modernising and expanding storage and export system in the southern region, and this vital step is represented by completing the second floating Single Point Mooring (SPM) platform. Iraqi government represented by South Oil Company has now the capacity to export from two new floating platforms. The additional achieved export capacity of the new floating platform is 900,000 barrels per day, and this means that we have now a total export capacity of 3.5 million barrels per day," he said.
    Jaffar also said a ship with a capacity of two million barrels had docked at Iraq's second new floating Single Point Mooring (SPM) platform and would be loaded with oil in the coming hours.
    The first of the long-awaited platforms began exporting last month at a capacity of 300,000 barrels per day.
    The Iraqi government has set a long-term goal of 12 million bpd that would rank it alongside Saudi Arabia and Russia as one of the world's oil superpowers.
    While many experts say that goal is too ambitious, Iraq is still expected to be the biggest source of new oil in the world over the next few years
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