Iraq to auction oil, gas blocks bordering Iran, Kuwait

Iraq says it plans to hold an international tender for the exploration and development of at least nine oil and gas blocks bordering Iran and Kuwait.

Iraq’s Oil Ministry announced in a statement that a press conference would be held on Monday to announce the details of the projects.

The Ministry added that the projects were located in the south and east of the country and included one offshore exploration target in the territorial waters.

“The ministry is targeting to boost both production and reserves of oil and gas in cooperation with international companies,” read part of the statement, as reported by Reuters.

The blocks on offer are located in the provinces of Basra, Misan, Muthanna, Wasit and the Central Diyala province.

The contracts would be different from previous service contracts Iraq signed with foreign firms to develop the country’s giant southern fields, said the statement.

Under the service contracts used for Baghdad’s post-2003 bidding rounds, including those for its southern fields like Rumaila, West Qurna and Majnoon, the ministry pays companies a fixed dollar-denominated fee for every barrel of oil produced.

While the model worked well for Baghdad when oil prices were high, the slump in prices left Baghdad paying the same fees to firms like BP, Exxon, Lukoil and Shell at a time when revenue from oil sales was significantly lower, Reuters added in its report.

Iraq has raised output rapidly in recent years with the help of foreign oil companies to become the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia.