BAGHDAD, April 25 (UPI) -- Iraq is likely to honor oil exploration and production deals signed by Saddam Hussein after meetings last week in Amman, Jordan.
Officials with India's Oil and Natural Gas Corp. and Pertamina of India met with Iraq Oil Ministry officials, International Oil Daily reports.
This follows conflicting information from the ministry, which earlier this week said all pre-2003 oil deals were considered canceled and the fields and exploration blocks would all be put to an open bidding process.
Previously Iraqi officials said contracts signed by Iraq and ONGC, Pertamina, PetroVietnam and China National Petroleum Corp. would be honored, though renegotiated to bring them in line with the post-Saddam energy legislation.
A number of companies claim they have signed deals that should still be honored or were near enough to signing to give them priority. The ministry has consistently denied any preference, instead insisting that oil and gas fields and exploration blocks would be put up for bid as it looks outside the country to invest in the oil sector and boost production.
Iraq has the world's third-largest proven reserves of oil, with high expectations for finding more.
Iraq says it will use a model contract called a Service Exploration and Production Contract for exploration. International Oil Daily reports the SEPC would give a five-year exploration period and two-year extension option with a 20-year limit on development and production. A 12.5-percent royalty would be owed to the government, along with a bonus tied to discovery and production, IOD reports, which compared it to the Saddam-era ONGC deal termed "exploration, development and production contracts."
ONGC was awarded more than 3,000 square miles in the southernmost part of the country, bordering Kuwait and Saudi Arabia. It would get five years plus a two-year extension option for exploration and a phased development giving ONGC total control, transitioning to state control. ONGC would be paid in oil for profit and to recoup cost, as well as options to purchase the oil.
