TV Bidding on Iraqi Oil: "It's Disastrous"Submitted by SteveMT on Tue, 06/30/2009 - 11:43
Iraqi oil licensing round runs into trouble
Iraq's landmark oil licensing round fizzles as foreign firms eye bigger cash rewards
* By Sinan Salaheddin, Associated Press Writer
* On Tuesday June 30, 2009, 11:11 am EDT
BAGHDAD (AP) -- The first bidding in more than 30 years for development rights to some of Iraq's oil fields stumbled Tuesday, with only one field being awarded as major foreign firms demanded better terms from a government in dire need of crude revenues.
About half of the eight oil and gas fields drew only one offer -- a lackluster showing for a government that had expected Western majors to bid aggressively for some of the world's largest crude reserves. The main stumbling block was price, with the companies asking for more money than Iraq was willing to pay for the crude they produced.
"It's disastrous," said Samuel Ciszuk, Middle East energy analyst with London-based IHS Global Insight. "It puts Iraq back on square one."
The televised event -- a year in the making -- coincided with the withdrawal of U.S. combat troops from Iraqi cities with government troops taking over security. But that development, hailed by Iraqis as a sovereignty milestone, likely served to only further raise questions among oil companies monitoring events around the country before committing to big projects.