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Tue 2 Nov 2010 04:49 PM

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No anti-French bias in Iraq oil wins: Total

Middle East chief Arnaud Breuilla says past political wrangling had no impact on oil field awards

No anti-French bias in Iraq oil wins: Total
Iraq Shirawa oilfield

There was no bias towards American oil companies during the awarding of contracts to international oil companies to operate in Iraq, Arnaud Breuillac, Total S.A’s most senior executive in the Middle East has told Arabian Business.

Breuillac, who is regional senior vice president, exploration and production for the French energy major, said:

“It didn’t happen. There was objectively no reason. The reality is it was done in a fair way. They said if you have the industrial capability, then nationality does not matter. It was done in such a transparent way, no one can argue there was any bias.”

There had been much speculation at the commencement of the last Gulf war that France’s failure to participate militarily would see it kept away from the tendering process for access to Iraq’s vast mineral wealth. Breuillac said those fears were baseless.

“Not at all. And I don’t think that would have been in Iraq’s interests [for French companies to be excluded from the process].  All the contracts have been managed by the Ministry of Oil,” he said.

“They would qualify the companies purely based on reference capabilities to have done a similar job elsewhere in the world… You can see from the bid results, only two American companies have won contracts, Exxon Mobil and Occidental. Conoco and Chevron did not get any contract at all.”

Total have so far been awarded one contract in Iraq – to operate the Halfaya oil field in conjunction with China’s CNPC and Malayasia’s Petronas. Breuillac said Total had some concerns about the way the bidding process was undertaken.

He said: “The Iraq bid mechanism is essentially quite simple – there are two numbers to put in an envelope, production plateau and fee. We do not consider this to be the optimum way to manage long term sustainability, however, we do recognise that Iraq needs to reconstruct their oil and gas industry quickly, so this was probably the best way to achieve that.

“Because, clearly, it got the companies to be motivated by getting to a certain level of production quickly. We think that those contracts will be executed exactly as they are awarded, there will be nor revisions.”

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