Iraq will award contracts to 41 foreign oil firms in a bid to ramp up production that gives multinationals a potentially lucrative foothold in the nation's huge oil fields, an official said on Sunday.
"We chose 35 companies of international standard, according to their finances, environment and experience, and we granted them permission to extract oil," Asim Jihad, spokesman for Iraq's oil ministry, told AFP.
Six other state-owned oil firms from Turkey, Vietnam, Pakistan, Thailand, Angola and Algeria will also be awarded extraction deals, said Jihad. The agreements, to be signed on June 30, are expected to be short-term arrangements although the ministry has yet to provide a timeframe.
The deal paves the way for global energy giants to return to Iraq 36 years after late dictator Saddam Hussein chased them out, a first step to access to the earth's third largest proven reserves.
"They will have the first right to develop the fields," said Jihad, adding that competitive bidding would come at a later date once the nation's long-delayed hydrocarbon law is passed by the parliament. Companies will be focused on fields in the north and the south where wells and perforations already exist, thus requiring minimal additional investment.
These agreements will be announced alongside Technical Support Agreements (TSAs) with five foreign oil majors. They cover Kirkuk field (Shell), Rumaila (BP), Al-Zubair (ExxonMobil), West Qurna Phase I (Chevron and Total), Missan province development (Shell and BHP Billiton) and the Subba and Luhais fields (Anadarko, Vitol and the UAE's Dome), according to a previous report.
The TSAs are a bridging contract designed to fast-track foreign oil involvement in Iraq.
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