The Iraqi government has failed to obtain investment from top international oil companies to invest during an exploration and development auction held for blocks near the borders of Iran, Kuwait and in offshore Gulf waters, Reuters reported.
Italy’s Eni, the only oil major to submit an offer for any of the blocks, made two unsuccessful bids.
Of the 11 blocks on offer, three went to UAE-based Crescent Petroleum, two to Chinese company Geo-Jade and one to United Energy Group, based in China. Five of the blocks failed to attract any bids.
“We have decided to speed up the development of border fields after five decades without investments … leaving them without investments meant wasting the oil wealth of the country,” Oil Minister Jabar Al-Luaibi said ahead of bidding.
“I say to the companies [that will bid], ‘thank you’ because this means trusting Iraq … and it means services and education for the citizens who live in the regions where you are going to operate,” he added.
UAE-based Crescent Petroleum was the sole bidder for the Khashim Ahmer-Injana exploration block, which lies close to the Iranian border. It was the lowest bidder for the Gilabat-Qamar exploration block in Diyala province.
The company will take a 19.99 % share of the net profits from Khashim and 9.21 % from Gilabat-Qamar, according to ABC News.
“It is a very successful round. As an Iraqi company it’s not a commercial matter, it’s about investing and developing the production of Iraq,” Crescent executive director Abdullah Al-Qadi said.
Two blocks were awarded to China’s Geo-Jade, securing a 14.67% stake in Naft Khana, and 7.15% in the Huwaiza block. Chinese United Energy also won a 4.55 % stake in the Sinbad block.
Director General of Iraq’s Petroleum Contracts, Abdul Mahdy Al-Ameedi, explained that a combination of factors lead to five blocks not attracting any bids, stating that some are the locations of former battlefields, some are hard to access, and that the offshore block needs more data.
He also said that there could be another round could be held to auction the remaining blocks but gave no further details.