European groups, including Royal Dutch Shell, Lukoil and Gazprom, and Asian
groups, such as China’s CNPC and Malaysia’s Petronas, were the main winners
at Iraq’s second oil auction, which completed the sale of its large fields.

The two biggest fields in the 10-lot auction – West Qurna 2 and the 12.6bn
barrel Majnoon with reserves totalling some 25bn barrels– attracted many
bids, although some smaller, conflict-hit fields went unsold.

Financial issue
Thamir Ghadhban, a prime ministerial adviser and former oil minister, said:
“We haven’t really seen US companies, and that is because of intense
competition . . . The issue is financial and technical and not at all
political.

“This confirms Iraq can manage its oil policy and activities without
politicisation.”

Iraq has auctioned off more proved oil reserves than are held by the US,
Mexico and UK combined.

Lukoil
Lukoil, Russia’s biggest private oil company, together with Norway’s Statoil,
on Saturday won the right to develop the West Qurna 2 field, which it had
been coveting for more than a decade.

Other winners on Saturday included Russia’s Gazprom and Sonangol, the Angolan
state oil company, which was willing to commit to developing fields in one
of Iraq’s most dangerous regions.

Shell and Petronas
On Friday, the first day of the latest auction, Royal Dutch Shell won the
right to develop Majnoon, becoming the second UK company to secure one of
Iraq’s biggest fields. Shell will partner Petronas, which was one of the
most active companies in the auction.

Also on Friday, CNPC, the Chinese state oil company, plus Total of France and
Petronas, won the right to develop Halfaya, another sizable field.

In June, BP became the first western oil group to be allowed back into Iraq in
more than 30 years, reversing the nationalisation of Iraq’s oil industry in
1972.

Iraq’s cabinet has since ratified the agreement and BP, together with China’s
CNPC, are soon to begin repairing and developing Rumaila, Iraq’s biggest oil
field. All the other deals still await ratification.

ExxonMobil
In November, ExxonMobil, which won the rights to the West Qurna 1 field
development, became the only US company to lead a winning bid, while
California’s Occidental is the only US group to have won a deal as a junior
partner.

Chevron, the US’s second biggest oil company, has been absent, even though it
had studied Iraq’s oil fields closely and was expected to bid. Insiders say
the group was hampered by its conservative, risk-averse board.

ConocoPhillips, the US’s third biggest oil company, which was expected to bid
with Lukoil on West Qurna 2, was also absent. Analysts point out that
Conoco­Phillips is struggling more than its peers financially.

Companies have promised within a decade to boost Iraq’s oil production by at
least 8.5m barrels a day to 11m b/d, more than Saudi Arabia produces.

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