My analysis “Iraq’s Fifth Licensing Round: Some Preliminary Considerations After the Auction” has been
published by Iraq Business News on May 7, 2018
May 7,
2018
London,
United Kingdom
ABSTRACT
— Iraq’s fifth licensing round was related to the offering of 11 oil and gas
blocks. In specific, 10 onshore blocks located along the Iraqi borders with
Kuwait and Iran, and 1 offshore block in the Persian Gulf waters. In the end,
six blocks were awarded, while five of the exploration blocks did not receive
any bids. One initial explanation for the mixed result might be that the Iraqi
government, for political reasons linked to the upcoming national elections,
had previously changed the date of the auction. So, the international oil
companies (I.O.C.s) did not have sufficient time to study the dossier relating
to the 11 blocks on offer. With reference to the contracts, the Ministry of Oil
has introduced some amendments that have changed the structure of Iraq’s
service contracts. The amended contract is different in that it sets a link
between oil prices and the remuneration given to the I.O.C.s. At the same time,
it introduces a 25% royalty on gross production. Thanks to the new contractual
structure, the government would like to force the contractors to act in a more
efficient manner.