Iraq adds six state companies for oil bid

HOUSTON, Nov. 6 (UPI) -- Oil companies from Pakistan, Thailand, Angola, Algeria, Turkey and Vietnam are qualified to bid on Iraqi oil and gas field deals to be awarded next June.

Iraq's ambassador to the United Nations, Hamid al-Bayati, said the government wanted to add national oil companies to the 35 other companies -- some of the world's largest -- that will offer deals to develop the fields.

Pakistan Petroleum, the Petroleum Authority of Thailand, Angola's Sonangol, Algeria's Sonatrach, Turkish Petroleum Corp. and Petrovietnam now are considered prequalified by the Oil Ministry for Iraq's first bidding round.

Iraq is opening up six oil and two gas fields to foreign investors, the first large-scale private offering since the sector was privatized in the 1960s. The oil fields represent Iraq's largest, including Kirkuk and Rumailah.

Bayati confirmed the companies on the sidelines of an Iraqi oil conference in Houston. He said the ministry wanted to add state-owned oil companies to the roster that includes Big Oil's Shell, BP, Marathon, ExxonMobil, Chevron, Total and ConocoPhillips. State companies from China, Russia and India also were prequalified among the first 25.

Iraq is signing deals to increase production, which is hovering around 2 million barrels per day. The country holds the world's third-largest proven oil reserves, with much more to be discovered. But it has been hampered by decades of war, sanctions and Saddam Hussein's misuse.

There is still debate, however, as to what extent foreign firms should be allowed access to Iraq's oil and gas sector. This is one holdup of a draft oil law that would be the first post-Saddam guidelines for governing the oil sector.

The law is also stuck between central government proponents of Baghdad's control over the oil strategy and the Kurdistan Regional Government, which favors a decentralized oil sector. The semiautonomous region has passed its own oil law and signed dozens of deals with small and midlevel international oil companies.

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Ben Lando, UPI Energy Editor

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(e-mail: blando@upi.com)