Iraq acts to convince foreign firms of oil potential

Iraq has offered international energy firms more data on the giant oil fields they will compete to work on, after executives complained that existing information was inadequate for them to evaluate output potential, it has been reported.

The offer goes some way to helping companies measure the risks involved in taking on multi-billion dollar investments in the oilfields of Iraq.

But other questions on transparency remain a concern, executives said on Friday.

Iraq is holding a bidding round for service contracts to overhaul dilapidated infrastructure and boost output.

Around 30 oil companies have already spent millions of dollars for data packages on the fields under offer, which contain more than a third of Iraq's reserves.

But after years of war and violence, periods of output data were missing, oil executives said.

"They're going to provide us with a second package of data for free," one executive from an international oil company said on condition of anonymity.

"I hope that will be enough, as previous data was patchy."

Poor data gave international oil firms that had carried out technical studies on the fields since the invasion of Iraq an advantage in the bidding race, said executives from several oil companies participating in a three-day workshop hosted by Iraq.

Officials have cleared up some oil company doubts on the contracts and sweetened the terms, but executives have raised other questions about transparency on contract awards both within and without the bid round.

There has always been concern that companies from countries that backed the U.S. invasion of Iraq in 2003 would get a head start in the process.

"Some people still say this is all sewn up," said an executive from one of the smaller international oil companies competing for the fields.

"I guess we won't know until they announce the awards."

Iraq has sent conflicting signals on competition for contracts, executives say. O

fficials have said firms must compete for contracts in the bid round while simultaneously agreeing deals without competition.

Royal Dutch Shell signed a preliminary deal last year to capture gas that Iraq wastes through burning. There was no bid round for the deal, which Japan's Mitsubishi has since joined.

The two companies were well placed to take the project after completing a joint study on Iraq's gas potential in the years since the war.

But the deal has attracted criticism from some members of Iraq's parliament for its lack of transparency and for handing a foreign oil company a monopoly on the gas.

Iraq has launched a limited bid round for its Nassiriya oilfield. It has invited Italy's Eni, Spain's Repsol and Japan's Nippon Oil to bid for an engineering, procurement and construction contract.

No other firms were invited. Several oil company executives had expected the field to be included in Iraq's second bidding round, but the field was not on the list announced in December.

Eni and Repsol negotiated for the field under the rule of Saddam Hussein.

But most other companies that negotiated under Saddam, and that have done work for Iraq's oil ministry since, have been told they must compete with everybody else. (Reuters)

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