MEOG: Iraq backtrack and Jurassic bids

This week’s MEOG looks at an about-face by one of Iraq’s largest IOC operators and the next phase of bidding for a major gas project in Kuwait.

Iraq’s Oil Minister announced this week that Russian oil firm Lukoil is retracting its announced desire to sell its 75% stake in the technical service contract (TSC) for the West Qurna-2 oilfield to Chinese companies.

Speaking to Iraq’s Al-Sabah newspaper, Ihsan Abdul Jabbar said that around six months of discussions between the Ministry of Oil (MoO) and the Russian firm had “contributed to the company’s official retraction [of] its desire to offer part of the shares for trading for sale to other companies”.

Abdul Jabbar noted that the ongoing efforts by IOCs to leave the country were because “investment in Iraq is not appropriate for the major investors and that they either look for other markets or partners in the renewable energy”.

However, he added: “Understanding the motives of (Lukoil) has contributed to developing solutions in co-ordination with the Ministry of Oil for some of the problems that the company believes have changed positively for the benefit of both parties.”

Meanwhile, state-owned Kuwait Oil Co. (KOC) is reported to have set a September 1 deadline for bids to construct facilities for Jurassic gas production in the north of the country.

Quoting company sources, the local Arabic language Al-Rai daily said that KOC was awaiting further bids for Jurassic gas production facilities (JPF) 4 & 5.

KOC, the upstream-focused division of Kuwait Petroleum Corp. (KPC), is reported to have received the go-ahead from the government’s Central Agency for Public Tenders (CAPT) to proceed with the tender process, with companies now asked to provide “financial and technical” bids.

Bidders have already been prequalified after the lowest bids for the two facilities following the receipt of qualifying offers from local and international firms during Q2 after they had submitted the required $28mn deposit.