Wednesday, December 20, 2017

Iraq’s Fifth Licensing Round


My report “Iraq’s Fifth Licensing Round” has been published on December 20, 2017, by Iraq Business News
December 20, 2017
ABSTRACT — Iraq’s Ministry of Oil has repeatedly said that it would like to renegotiate the terms of its service contracts with the international oil companies (I.O.C.s) to link the fees the companies receive for developing the fields to the oil prices and to have them share the burden when oil prices decrease. However, discussions between the federal government and the I.O.C.s have been going on for the past two years with no tangible results until now. Companies affirm that they have submitted some recommendations, but then the process has not moved on. At this point, it seems that to have a successful fifth licensing round, the federal government must produce in the coming months a new model contract (or at least an amended version of the present technical service contracts) capable of satisfying according to different price levels both the government and the I.O.C.s. Otherwise, it’s difficult for Iraq to reach the production target of 6 million bpd of crude oil by 2020, especially if other neighboring countries might soon offer better contractual terms.