China companies emerge big winners in Iraq’s energy bidding round

Chinese companies won most of the oil and gas deals in Iraq’s energy bidding round launched yesterday as the Opec member country seeks to strengthen reserves and revenue.

Twenty-nine oil and gas projects are available in the latest energy bidding round, with the first of them awarded on Saturday. Sixteen fields and exploration blocks were offered as an appendix to the fifth bidding round held in 2018. Then, 11 blocks and fields were offered, but only seven were awarded. The rest are being offered as the sixth bidding round.

Twenty-two energy companies have been pre-qualified to take part in the auctions.

Out of the 21 projects auctioned on Saturday and Sunday, 10 were awarded to companies from China.

Zhongman Petroleum and Natural Gas Group (ZPEC) won rights to develop the Northern Extension of East Baghdad oilfield. It will be entitled to 6.67 per cent share of the profit. The bid was less than Iraqi KAR company’s 12.22 per cent.

The field is shared by Baghdad and Salahuddin provinces in central Iraq.

It also took the Middle Euphrates fields in central Iraq, offering 11.67 per cent share of net profit, which was higher than the 9.35 per cent share the oil ministry was willing to pay. The company subsequently accepted the 9.35 per cent share offered by the ministry.

It is a cluster of three fields – Kifl, West Kifl and Merjan – shared by the provinces of Najaf and Karbala. The fields hold both oil and gas reserves.

China’s UEG was the only company interested in Fao block in the southern province of Basra. The oil ministry accepted its bid of 25.16 per cent of net profit.

The block, which is located near the border with Iran and Kuwait, has oil potential.

Zhenhua won the deal to develop Qurnain block south of Iraq. It initially sought 25 per cent of the net profit, but later accepted the oil ministry’s rate of 17.3 per cent.

The filed is shared by the provinces of Najaf and Anbar in southern Iraq.

It also won a bid to develop Abu Khema oilfield in the southern Muthanna province and will get 9.1 per cent of the net profit.

Geo-Jade won a bid to develop Zurbatiya block in Wasit province in central Iraq.

It initially sought 12.65 per cent of the net profit, but later accepted the Oil Ministry’s offer of 7.65 per cent. The block has oil potential.

Iraq’s Block 7 was awarded to China’s CNOOC with a share in the net profit of 25.88 per cent. The block, which has oil potential, extends across the country’s central and southern provinces of Diwaniya, Babil, Najaf, Wasit and Muthanna.

China’s Anton Oilfield Services won a bid to develop Iraq’s Dhufriya oilfield in the central Wasit province, and Sinopec won a bid to develop Summer block, which has oil potential, in the southern Muthana province. They will receive 29.16 per cent and 17.85 per cent of the net profit, respectively.

Sinopec’s bid to develop Adan block with oil potential in Basra was rejected. It sought 31.67 per cent of the net profit, more than double the share set by the Oil Ministry of 15.8 per cent.

Iraqi KAR company won the rights to develop Dimah oilfield in the southern province of Maysan. It will receive 6.2 per cent of the net profit and was one of seven companies that vied for this field.

Sasan and Alan fields in the northern province of Nineveh were also awarded as one project to Iraqi KAR company. It will be entitled to 17.25 per cent of the net profit. Both fields hold oil and gas reserves.

Several projects received no bids and companies have until today to submit their bids for these projects, Oil Minister Hayan Abdel Ghani said. These include Anbar, Okashat, Anah and Al Anz blocks with oil and gas potential in Anbar province; Pulkhana field with oil and gas reserves in Salahuddin province; Tel Al Hajar block with oil and gas potential in Nineveh province; Block 11 in Muthana province; and Qalaat Salih block with oil potential in Maysan province.

The Okashat block with gas potential in the western Anbar province received no bids.

Prime Minister Mohammed Shia Al Sudani said Iraq is committed to “assuring a safe and stable working environment” and to remove “complicated routine and bureaucracy”.

He added that the recent contacts signed with international oil companies (IOCs) will help Iraq to stop burning natural gas within three to five years.

Mr Abdel Ghani said the offered projects will boost the country’s oil and gas reserves.

Twenty-nine oil and gas projects were up for grabs in energy bidding rounds that started at the weekend in Baghdad