Just 1 Deal on First Day of Iraq’s Energy Auction

The first day of Iraq’s fourth energy auction resulted in just one successful bid, with four of the today’s six exploration fields receiving no bids from the 47 pre-qualified bidders. The six blocks offered today were numbers 2, 9, 6, 12, 1 and 11.
A consortium of Kuwait Energy (40%), Turkey’s TPAO (Turkiye Petrolleri AO) (30%) and the UAE’s Dragon Oil (30%) won the rights to explore a 900-square-kilometer (350-square-mile) Block 9, near the Iranian border in the oil-rich southern Basra province. It will be paid $6.24 for each barrel of oil equivalent it finds.
An unsuccessful bid was made for the rights to the 8,000-square-kilometer (3,100-square-mile) Block-6 in the southern Anbar and Najaf provinces. A consortium led by UK’s Premier, along with Vietnam’s PetroVietnam and Russia’s Bashneft, sought $9.85 for each barrel of oil equivalent, but the government offered to pay only $5 per barrel and withdrew the lot.
Four other blocks attracted no bidders. The bidding will continue on Thursday for the other six blocks, and for blocks 2 and 6 which will be offered again to give companies that weren’t present today a chance to bid. Seven of the 12 exploration blocks are believed to hold natural gas, and the rest both natural gas and oil.
The oil minister said that if Thursday’s auction also attracts little interest, Iraqi companies would explore those lots, ruling out the possibility that contract terms would be revised.
(Sources: AKnews, AFP, Associated Press, Bloomberg)