Oil firms wanting Iraq deals must register

WASHINGTON, Jan. 3 (UPI) -- Iraq's Oil Ministry said all companies interested in winning contracts need to register as Iraq moves closer to its first tenders of oil fields.

Iraq's currently producing oil fields require billions of dollars in investment -- either from international oil companies or via the ministry's companies -- and Oil Minister Hussain al-Shahristani has said deals will be announced soon.

There have been mixed messages from the ministry, however, as to whether certain fields will be awarded in an open bidding process or negotiated between the ministry and a selected company. And the type of contract itself, a controversial aspect, has not been specified by the ministry.

"Contracts and licensing directory in (the) Oil Ministry on Wednesday called on all qualified and well-known international companies to submit their applications to work in Iraq," ministry spokesman Assem Jihad was quoted by the Voices of Iraq news agency. "Companies have to fill in application forms and submit the documents before the end of January 2008."

Rochdi Younsi, a Middle East analyst with the business risk firm Eurasia Group, said companies are largely awaiting a national oil law setting the foreign investment ground rules before agreeing to direct large sums of money in Iraq.

The registration deadline "intends to demonstrate movement on the energy front and secure international oil companies' commitment to dealing with the central government," Younsi said.

The central government has been accused by the Kurdistan Regional Government of stalling progress in the oil sector and the national oil law specifically; the central government accuses the KRG of the same.

But the KRG has gone forward with its own regional oil law and signed more than 20 exploration and production contracts with foreign firms, sparking anger from Baghdad.

"Shahristani wants to use this registration process to filter future partners and exclude firms that have already signed deals with the Kurdish Regional Government," Younsi added.

Foreign firms have stayed largely out of Iraq deals because of the legal uncertainty and security situation. Most larger companies, including the majors, have conducted studies or provided training to ministry staff.

Shahristani told United Press International in November he's in negotiations with major oil firms for "technical-support contracts" for producing super giant fields.

Iraq's overall strategy is to increase production beyond 3 million barrels per day in 2008 -- it's a goal carried over the past few years, though production has increased from an average 2 million bpd post-2003 to 2.4 million bpd in November.

To do so, the ministry has targeted not only producing fields, but discovered but not producing fields as well as exploration.

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Ben Lando, UPI Energy Editor

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(e-mail: blando@upi.com)