Iraq's oil ministry will confer with foreign oil companies next month as it seeks to speed up its second bidding round for oil and gas licences. "We are planning a roadshow meeting in Istanbul next month," said Abdul-Mahdi al Ameedi, the deputy director general of the ministry's petroleum contracts and licensing directorate. "We are hoping to expedite the process so that we can actually sign the contracts by the end of the year." The move could be a face-saving tactic, after Iraq's much heralded first post-war oil bidding round, which was staged in Baghdad last week before live TV cameras, produced only one bid that met the ministry's terms. International companies spurned contracts to develop all but the largest of the six oilfields in the auction, plus two gasfields, after the Iraqi oil minister, Dr Hussein al Shahristani, asked the leading bidders to accept drastically lower payments. Samuel Ciszuk, the Middle East energy analyst with the consulting firm IHS Global Insight, said: "This is the worst possible start for the planned second licensing round, as investors have given Iraq's investment climate, with its lack of legal, political and physical security, a strong vote of no confidence. "The second licensing round is now held aloft by the prime minister and the oil ministry as the next move, but all things being equal, there is no reason to believe the offering of 11 significant Iraqi fields will fare any better than those in the first round." Instead of rushing forward with the next licensing round, originally scheduled for December, Mr Ciszuk said, Iraq's government should focus on passing a long-stalled law that would establish a legal framework and political legitimacy for oil and gas deals. But international oil firms remain intensely interested in gaining access to the country's vast underdeveloped oil and gas potential, and plan to show up for the next auction. The French energy group Total would continue to bid for contracts in Iraq, its chief executive, Christophe de Margerie, told reporters. He said he had raised the matter with Dr al Shahristani. "I think he understood our position, and we will do our best on both sides to find a solution for Total to participate in the near term and medium term to the development of the huge resources of Iraq," Mr de Margerie said. The two largest Scandinavian oil producers, StatoilHydro of Norway and Maersk Oil and Gas of Denmark, have also said they would consider bidding in future Iraqi licensing rounds after failing to win contracts last week. "The oil sector of Iraq represents significant business potential for Maersk Oil," said Jakob Thomasen, the company's head of exploration and new business. Iraq's oil ministry, stung by criticism that it has moved too slowly to improve crude output, is also pushing ahead with direct negotiations over some oilfields withheld from the auctions. It has asked Eni of Italy and Nippon Oil of Japan for revised technical and commercial bids for work on the Nassiriyah oilfield, Mr al Ameedi said. On Friday, the Japanese newspaper Sankei Shimbun said a group led by Nippon Oil hoped to reach a deal by the end of this month. Meanwhile, opinions were divided on whether the tentative deal that BP and China National Petroleum Corporation struck last week for work on Iraq's biggest oilfield, Rumaila, was commercially worth the trouble. Some analysts called the proposal to add 1.85 million barrels per day (bpd) of production for a fee of US$2 (Dh7.43) per barrel a loss leader. Others said BP's extensive knowledge of the field, which it discovered, and economies of scale would make the project worthwhile. The Iraqi cabinet approved the deal on Wednesday, and Mr al Ameedi said it could be signed within two weeks. Underscoring the political pitfalls of operating in Iraq, however, Ali Balou, the head of the Iraqi parliamentary oil and gas committee, said the contract required parliament's approval, something the ministry does not intend to seek. Dr al Shahristani and the Iraqi prime minister, Nouri al Maliki, embroiled in power struggles over oil jurisdiction and policy with parliamentarians, the country's Kurdish region, oil unions and the management of Iraq's biggest state oil company, have been doing their best to portray the Rumaila agreement, and therefore the entire bidding round, as a triumph that would significantly boost Iraq's crude output on the government's terms. Iraq produces about 2.4 million bpd of oil from the world's third-largest proved reserves, and exports roughly 1.9 million bpd. email@example.com
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