Iraq to Hold Mini-Auction for Nassiriya Field

Source: Reuters 9/11/2011, Location: Middle East

Four international oil companies have shown interest in developing the Nassiriya oilfield and Iraq may hold a mini-auction for the field, senior oil official said. Iraq has made a number of attempts to reach agreement with foreign firms on Nassiriya, a largely undeveloped field listed as having reserves under 5 billion barrels. Talks with a Japanese group led by Nippon Oil, a unit of JX Holdings, reached a dead end over financing issues last year and Iraq said it would develop the field itself.

Then, earlier this year, a government official said Iraq planned to invite oil companies to bid on the field. Abdul-Mahdy al-Ameedi, head of the oil ministry's contracts and licensing directorate, said Nippon, ENI, Chevron and Repsol had submitted proposals.

"If we would like to do so, we will hold a mini bidding round and we will ask companies to participate," Ameedi said at a meeting with oil companies in Amman, Jordan. "They would have to develop the field and a refinery with a capacity of 300,000 bpd (barrels per day)."

Ameedi said only three of the four would be invited -- Chevron, ENI and Nippon. Repsol was not qualified, he said. Iraq has signed contracts with international oil companies to ramp up output capacity to 12 million barrels per day by 2017, although analysts say it is unlikely to reach that goal. Iraq already has contracts to increase production to a level that far exceeds its infrastructure capacity. Ameedi said any development of the Nassiriya field would have to include the construction of a refinery with a capacity of 300,000 bpd.

"The suggestion of the oil ministry to some companies is that if they would like to develop and produce Nassiriya, they have to build a refinery in order to be fed by the crude oil produced by Nassiriya," he said. "Therefore, these two projects should come together."


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