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| Abdul Mahdy al-Ameedi (left), head of the Iraqi oil ministry’s contracts and licensing department, shakes hands with Abdul Wahid, senior manager of business development at Pakistan Petroleum Limited, during a contract-signing ceremony in Baghdad yesterday |
Iraq initialled a gas exploration deal with Pakistan Petroleum yesterday, a senior official said, the first of three successive contracts aimed at increasing the country’s oil and gas reserves.
“We are now initialling a contract between the Iraqi oil ministry and Pakistan Petroleum,” said Abdul Mehdi al-Amidi, the head of the ministry’s contracts and licensing department.
Referring to deals with consortia led by Kuwait Energy and Russia’s Lukoil that will be initialled today and tomorrow respectively, Amidi said: “We will send all these agreements to the cabinet for approval, and then we will sign the final contract.”
“That will take about one month.”
During a two-day auction for exploration blocks in May, Pakistan Petroleum won a contract for a 6,000 square km block thought to contain gas in the central Iraqi provinces of Diyala and Wasit.
The company agreed to a remuneration fee of $5.38 per barrel of oil-equivalent eventually extracted.
The May 30-31 sale, which ended with three blocks awarded to foreign firms, was labelled a failure by analysts as eight of the 12 blocks on offer received no bids whatsoever, including two that were offered twice.
The bid round, the fourth public auction of Iraqi energy contracts since mid-2009, came amid progress in ramping up oil exports, which account for the vast majority of government income, and as Baghdad eyes higher gas production to increase woefully inadequate electricity supplies.
Iraq has proven reserves of 143.1bn barrels of oil and 3.2tn cubic metres of gas, both of which are among the highest such deposits in the world. The country is slowly rebuilding nine years after the U.S.-led invasion that toppled dictator Saddam Hussein.