BS: Iraq Oil Bids

Subject: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 30 Jun 09 - 08:09 PM

Iraq put up fields with 44 billion bbls total.
Only one field, the large Rumalia oil field with est. 18 billion bbls, was successfully bid in when partners British Petroleum and China's CNPC met Iraq's conditions.
Partners Exxon-Mobil and Petronas (Malaysia) were unsuccessful bidders for this field.

China appears to be the most active bidder, singly or with partners.
Although Iraq refused all bids except that for Rumalia, behind the scenes dickering is going on and new agreements could be announced shortly.

The most complete set of reports is found at the http://english.aljazeera.net news website. The television wing of this important source of Middle East News will soon be available in Canada.

Foreign oil firms reject Iraq terms

Subject: RE: BS: Iraq Oil Bids
From: Ron Davies
Date: 30 Jun 09 - 10:18 PM

My understanding of this is that the foreign firms would not themselves own the oil, but would be paid by Iraq for their assistance in drilling for it. Also unclear what role the Kurdish government would play in this--I believe this was an initiative of the "national" government.

Interesting to see it appears not very successful at this point.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 01 Jul 09 - 12:13 AM

The bids are for 20 year service contracts. Above a certain minimum production, a per bbl. fee would be paid to the bidding company for any crude they produce in excess of that minimum target.
Iraq set the fee at $2.00. (Reserves of 18 billion bbls, Rumala est., eventually could mean a lot of cash for the successful bidder at $2.00/bbl. You figure it out).
Most bidders wanted more, but bargaining is normal and expected and is ongoing. Reportedly seven deals are being considered by the Iraqi government. A CNN report that the bidding is a flop is nonsense.

The eventual Iraqi take, if all goes well, is $1.7 trillion. I doubt that this will be reached, but it will be considerable in any case

Yet to be worked out, of course, after production is firmed, are contracts by Iraq for sale of the oil; contractors probably will end up as major buyers but this is up in the air.

Iraq's government says the KRG (Kurdish) contracts are illegal. If a central Iraq government is supported by the U. S., UK, UN, E.U. or whatever, there could be more violent disruption if the Kurds decide to force the issue. The U. S. has set 2011 for leaving the country, but this could change.

The U. S., UK, etc. and major oil companies have refused to deal with the Kurdish Regional Government, and support Iraq's rights as stated in their constitution (as presently written!). I dunno.

Fear of violence also has influenced the bidding.

Subject: RE: BS: Iraq Oil Bids
From: Ron Davies
Date: 01 Jul 09 - 09:01 AM

It's not even clear the one agreement will go through--opposition from some in parliament who question the legality.

Oil firms are not at all happy with the "maximum bonus" and "set fee per barrel" provisions. I have no idea what CNN says, but so far, the bidding is a flop--from the firms' standpoint. But the Iraqi government says it is happy with the outcome for the Rumalia field.

Source: WSJ today

Companies especially unhappy, as I noted earlier, with the idea they would own no oil themselves.



Unclear what any next move on any side will be--another bidding process or compromise by the oil ministry.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 01 Jul 09 - 04:26 PM

Bids are far from what Iraq has asked for in the Kirkuk area. Bids in this area are under discussion in cabinet.
These are fields in or close to the Kurdish area; there are strong fears of trouble, and bidders may not think the gamble is worth it.

Of the some 48 billion barrels of reserves open to the bidders in the first auction, the terms on the Rumala field with 18 billion barrels (and enough wells already drilled so estimates are good) were agreed on. This represents 37% of the reserves in the first offering, and is a good start.

Bids on some other fields are in the dickering stage.

Subject: RE: BS: Iraq Oil Bids
From: DougR
Date: 01 Jul 09 - 07:37 PM

Gee, I thought George Bush and Dick Cheney owned all the oil in Iraq. You mean the oil STILL belongs to the Iraqis? Wow!

DougR

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 01 Jul 09 - 09:04 PM

The Chinese could end up with a good share of it. It depends on how much risk they are prepared to take on.

?Bush and Cheney- perhaps they own a minority position in some oil company, like many other investors. It takes intelligence to control a major position in any commodity, and ........!~

Subject: RE: BS: Iraq Oil Bids
From: Ron Davies
Date: 01 Jul 09 - 11:08 PM

GWB had to give up his share of the Iraqi oil since the shoe-thrower was improving his aim. And Dick gave up his to a Iraqi gun expert who promised to teach him the difference between a duck and a friend.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 01 Dec 09 - 02:59 PM

The June auction by Iraq left several fields without bids; only the Rumaila field was taken by British Petroleum + China National Petroleum Co.
The terms set by Iraq on the service contracts were deemed too high.

Now the oil companies are accepting Iraq's conditions.
Royal Dutch Shall and Exxon-Mobil have agreed to accept $1.90/bbl for each barrel produced above the current level (West Qurna), about half what the oil companies wanted.

Eni (Italian), Occidental and Korea Gas have agreed to similar terms for the Zubayr field.

The combined reserves for these fields is estimated at some 30 billion barrels.

It is expected that Iraqi output will be boosted to 7 million bbls/day, rivaling the Saudi output.

Iraq is considering opening an auction for other fields.

New York Times, Nov. 30, 2009; "Oil Companies Look to the Future in Iraq," Timothy Williams.

Subject: RE: BS: Iraq Oil Bids
From: Jack the Sailor
Date: 01 Dec 09 - 03:16 PM

>>>Gee, I thought George Bush and Dick Cheney owned all the oil in Iraq. You mean the oil STILL belongs to the Iraqis? Wow!

DougR <<<

Believing that they could take it was just one more of their many mistakes.

Remember Wolfowitz saying that the "liberation" would be paid for with Iraqi oil?
Remember Cheney saying we would be greeted as liberators.

Thieves are thieves. Being bad at it is no excuse.

Subject: RE: BS: Iraq Oil Bids
From: Teribus
Date: 02 Dec 09 - 06:48 AM

"Believing that they could take it was just one more of their many mistakes."

Not in one thousand years JTS it was the anti-Bush, anti-war crowd that claimed that the US went into Iraq to "steal" Iraq's oil. It was the anti-Bush, anti-war crowd that said the invasion of Iraq was all about the USA taking control of the region and its oil. All complete and utter bollocks of course as I pointed out many many times.

As Doug R said:

"You mean the oil STILL belongs to the Iraqis"

It always did, it always will.

Ron Davies said:

"My understanding of this is that the foreign firms would not themselves own the oil, but would be paid by Iraq for their assistance in drilling for it."

I told you lot that years ago. Only it is not just drilling for it, that is one of the easier aspects of it. In the case of BP and their Chinese partners they have been awarded a service contract to develop the field, within a target period they MUST double field production or they do not get paid a cent. That is how BP ended up as part of the deal, they have the experience and technology to do this the Chinese who are the majority partner in the venture do not. There were six licences up for bid and BP/CNPC originally wanted $4 per barrel produced, they then entered negotiations with Iraq National Oil Company and accepted $2 per barrel produced, all the other bidders withdrew their bids as the risks for return was considered to be unacceptable.

Iraq's established oil fields are in a mess because Saddam Hussein used the countries oil wealth to buy arms, because of the Iran Iraq War and Desert Storm the onus was on production and no down hole, or reservoir maintenance was ever done. This normally results in a massive reduction in what can be recovered from the reservoir. The technology that existed in the North Sea in the late 60's, early 70's caused people to believe that the North Sea would run out of oil in 15 to 20 years, well it is still going strong due to advances in reservoir technology before you would expect to get a maximum of 50 to 60% out now if you do things right you can get 80 to 90% out.

Oh by the bye, I don't think anybody said that the "liberation" of Iraq would be paid for with Iraqi oil. I think what was said was that the reconstruction of Iraq would be paid for with Iraqi oil - Now that is a different thing altogether.

Subject: RE: BS: Iraq Oil Bids
From: bubblyrat
Date: 02 Dec 09 - 06:59 AM

"Behind the scenes dickering" ,eh ?? There was plenty of that aboard HMS Eagle in 1968, I can tell you !!

Subject: RE: BS: Iraq Oil Bids
From: GUEST,TIA
Date: 02 Dec 09 - 08:19 AM

Oh fer crissakes, the Bush administration ultimately *admitted* that it was about oil!!!!!
(Thus proving the "anti-Bush, anti-war" crowd correct from the start).

Subject: RE: BS: Iraq Oil Bids
From: Teribus
Date: 02 Dec 09 - 12:46 PM

Guest TIA it was not someone from the Bush Administration it was Alan Greenspan. It was all about oil but not in the way that the anti-Bush, anti-war camp were wittering on about. Doubt that then go and take a look at how much the US depends on the region for its oil imports - pretty minimal. The same however cannot be said for some of the USA's major allies.

Subject: RE: BS: Iraq Oil Bids
From: DougR
Date: 02 Dec 09 - 01:44 PM

Teribus: There you go again! Raining on TIA's parade.

DougR

Subject: RE: BS: Iraq Oil Bids
From: Donuel
Date: 02 Dec 09 - 02:13 PM

The heavy breathing right wing Bush supporters will not appreciate me pointing out certain salient facts... HOWEVER

When the US decided it was time for Iraq to write their own new Constitution we made sure that on the committee to write such an august document would be Exon and BP executives. They concentrated on the part of the Constitution that pertained to foreign sales of their oil. Were they fair and impartial? Perhaps, perhaps not.

Whatever illegalities claimed by the Iraqi congress regarding oil sales will probably be based on the rather flawed and skewed Iraqi Constitution.

Subject: RE: BS: Iraq Oil Bids
From: Teribus
Date: 02 Dec 09 - 03:20 PM

Were they fair were they impartial??

Six licences up for bid only one awarded because the terms and conditions were too tough and favourable towards the Iraqi National Oil Company - sounds as though they were being pretty fair and impartial.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 02 Dec 09 - 04:44 PM

Terribus has voiced some facts here; don't know who started that "the war is about oil" nonsense.

The only way the U. S. could take over the Iraqi's oil would be by making them a colony (with all the expense that would entail).

As Terribus writes, and I posted last June, the agreements are for service contracts; the oil companies will receive a reasonable payback, but will not 'own' the oil. The fields were poorly maintained and under developed; 'servicing' them will be expensive.

Still many problems. The Kurdish area has made some deals, mostly with a Norwegian consortium, but the Iraqi government has opposed them. Continuing bomb attacks will slow development is some areas.

Subject: RE: BS: Iraq Oil Bids
From: Donuel
Date: 02 Dec 09 - 04:48 PM

Iran used to be a colony when we installed the Shaw of Iran.
The CIA even supported Saddam up until the first Bush.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 02 Dec 09 - 06:20 PM

Iran (digression)
1795, Agha Muhammed Khan consolidated the country and was named 'shah'. In the 19th c., foreign countries, mainly Britain, took over most of Persia's economic resources. The Qujar dynasty continued until 1925, although there were many revolts.
The Pahlevi family were shahs until 1979. Much British influence before WW2. In 1941 came occupation by Russian, and British and Indian forces.
The mess since then is pretty well known.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 02 Dec 09 - 08:31 PM

Iran's oil and natural gas are a state monopoly, OPEC's second largest producer after Saudi Arabia.
Very large natural gas reserves.

Subject: RE: BS: Iraq Oil Bids
From: GUEST,TIA
Date: 03 Dec 09 - 02:48 PM

Yes, T; current imports from Iraq are tiny.
Yes, we get most of our oil from Canada.
But Canada is well past its peak production - then we will need it from somewhere else won't we?
Guess which country is projected to not pass its peak for the next 10 to 20 years?
(There are only two of them, and one is a place we would not dream of invading).
Then go look at the "Project for a New American Century" plan that was written in the mid-1990s when Clinton was president. Where did they (Cheney, Wolfowitz, Perle, etc.) point to as an important future source of oil?
You have your homework. Go do it, and report back.
You too Doug.
Nice dry parade here.

Subject: RE: BS: Iraq Oil Bids
From: pdq
Date: 03 Dec 09 - 04:48 PM

{2006 data}

Rank        Country            Proved reserves (billion barrels)

1.        Saudi Arabia                     264.3
2.        Canada                            178.8
3.        Iran                                      132.5
4.        Iraq                                       115.0
5.        Kuwait                                 101.5
6.        United Arab Emirates        97.8
7.        Venezuela                           79.7
8.        Russia                                 60.0
9.        Libya                                 39.1
10.        Nigeria                              35.9


{can't see how Canada has passed it's peak oil production capability...

can't see how that would have much to do with Middle East politics, either}

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 03 Dec 09 - 05:20 PM

Canada reserves high, exports from the oil sands of Alberta increasing and billions authorized for new projects underway.

U. S. Dept. Energy, EIA estimates:
Saudi- 264 billion bbls.
Canada- 180 billion
Iraq- 112 billion

Production expected to be 3 million bbl/day by 2015. National Energy Board of Canada estimates. Current production costs are $30-$35/bbl, so current prices at over $70/bbl offers a profit.
New techniques require much less water than current methods. New multi-billion dollar pipeline authorized.
www.neb.gc.ca; "Canada's Oil Sands- Opportunities and Challenges to 2015: An Update Questions and Answers.

Pipeline and refiners plan $31 billion expansion by 2015.
A $3 billion addition, the 30-inch pipeline being extended from Illinois to the Gulf Coast will carry oil sands crude to Texas refiners. (Exxon-Mobil and Enbridge).
The Gateway pipeline will carry oil sands production to the B. C. west coast, for China and California. Enbridge the constructor.
http://oilsandstruth.org
Also reported in American Petroleum Institute Magazine, "In the Pipe."

(Not pertinent to Canada production, but British Petroleum and ConocoPhillips will build a 1000 mile pipeline from Alaska south through Alberta. NY Times.)

Subject: RE: BS: Iraq Oil Bids
From: Ed T
Date: 03 Dec 09 - 05:31 PM

Canada's oil sands production is more expensive to process....and comes on stream whern the price rises.

Subject: RE: BS: Iraq Oil Bids
From: Teribus
Date: 03 Dec 09 - 05:44 PM

You are also forgetting the USA's own Shale Oil deposits as yet untouched, last time I heard somebody talking about them (late 1980's / early 1990's) the reckoning was that at consumption at that time the USA had enough to last them about 400 years. But as stated above the price has got to be right and there would be a definite environmental price to pay (The Rockies disappear)

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 03 Dec 09 - 07:57 PM

Oil sands are on stream. Note production-price differential, posted above; National Energy Board Canada figures.
Oil producers are talking about $80/bbl to make money, but they are doing OK at much less.
Of course new sands developments such as two now in the works cost a lot in initial development; profits are low to nil for the first couple of years.

Current oil sands production is 1.3 million bbl/day, expected to reach 3 million plus in 2018.
Alberta government figures: http://www.energy.alberta.ca/OurBusiness/oilsands.asp

Subject: RE: BS: Iraq Oil Bids
From: GUEST,TIA
Date: 03 Dec 09 - 08:17 PM

Okay geniuses. Now go look up the "payback ratio" for extracting useable energy from oil sands and oil shale.

And also look up the relationship between reserves and production history. Hint - there is a classic 1949 paper by a Shell geophysicist.

And if you do not know how Canada's reserves and production, and America's imports relate to Mid-East politics...I give up.

Enjoy your little world.

Subject: RE: BS: Iraq Oil Bids
From: pdq
Date: 04 Dec 09 - 10:28 AM

"Oil producers are talking about $80/bbl to make money..."{oil sands}

today:
          BRENT CRUDE FUTR (USD/bbl.)        79.440        1.08 1.38    09:59

Well, $79.440 is getting pretty close to $80 per barrel.

The world's investors have no confidence in the current administration to stop its insane overspending so the US dollar drops day after day, causing commodities to rise.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 04 Dec 09 - 05:03 PM

The low U. S. dollar is a real worry to Japan and other Asian exporters of cars, etc; Japan is trying to prop up the yen.
In the last three days, the dollar has climbed three cents relative to the yen, but Asian manufacturers are hoping for much more.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 11 Dec 09 - 07:31 PM

Two bids were settled today.

The large Magnoon field was taken by Royal Dutch Shell and Petronas (Malaysia), joint bidders. $1.39/bbl, 20 year service contract.

The smaller Halfaya field went to China CNPC, Petronas and Total (France), joint bidders, $1.40/bbl.

Petronas, the Malaysian state oil company, is a growing player in oil field development.

No bids were made for the East Baghdad and Eastern fields. Security is deemed to remain low in these areas.

Subject: RE: BS: Iraq Oil Bids
From: Folkiedave
Date: 11 Dec 09 - 07:54 PM

You mean we have spent http://costofwar.com/ this much and there are places still not secure?

We are not very good at this are we!

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 11 Dec 09 - 09:36 PM

Total and Chevron, two years ago, signed an agreement to develop the Magnoon field whose development went to Shell and Petronas today. They bid $1.75 today, thus lost out to the winning bid of $1.39.
Don't know what the share of Petronas is, but probably 25%.
Shares in the smaller Halfiya field are divided 50% to the Chinese National Petroleum Company, with 25% each to Petronas and Total.

China isn't doing badly at all, now sharing in one giant and one smaller field, and having already picked up the Ahdab field exclusively.

Five more fields will be offered tomorrow.

The East Baghdad field which received no bids underlies Sadr City district where bombings are frequent.

Folkiedave, time to send in Cheney and his Blackwater crew?

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 11 Dec 09 - 10:12 PM

More details-

Majnoon Field- Shell 45%, Petronas 30%, Iraqi gov't retained 25%.
Not sure how the Iraqi stake will influence development.

Subject: RE: BS: Iraq Oil Bids
From: Little Hawk
Date: 11 Dec 09 - 10:26 PM

With the right payoffs placed in the right hands? Hardly at all.

Subject: RE: BS: Iraq Oil Bids
From: Folkiedave
Date: 12 Dec 09 - 04:16 AM

Folkiedave, time to send in Cheney and his Blackwater crew?

I thought they were already there!! Well at least the Blackwater Crew.

Subject: RE: BS: Iraq Oil Bids
From: Teribus
Date: 12 Dec 09 - 09:45 AM

Q: "Not sure how the Iraqi stake will influence development."

Little Hawk: "With the right payoffs placed in the right hands? Hardly at all."

What the consortium partners Shell-Petronas-IOC have successfully bid for is the licence to develop and operate the Magnoon Field. They do not own the oil the consortium will be paid $1.39 per barrel produced provided that they meet production targets, the price of oil per barrel today is $69.52. The Iraqi Government who owns the oil therefore get the lions share.

The Iraqi Government retains an interest and a voice on field decisions via it's 25% share.

Wonder what happened to all those on this forum who were previously yelling about the US stealing Iraq's oil?? Oh yes they have now shifted tack and it's the US and UK in Afghanistan to control non-existent oil & gas pipelines in order to steal someone else's oil, or gas, as the case may be.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 12 Dec 09 - 12:45 PM

Saturdays successful bids-

Lukoil (Russia) and junior partner, Statoil (Norway) offered the low bid of $1.15/bbl for the giant West Qurna field.

Sonangol (Angola) was successful on two fields near Nineveh in the north, and their bid for a field near Mosul, rejected Friday, was accepted Saturday.

Gazprom (Russia) with partners Petronas (Malaysia), Kogas (S. Korea) and TPAO (Turkey) won for a field near Basra, with a bid of $5.50/bbl (a higher bid than others proferred in the auction).

Petronas (Malaysia) and Japex (Japan) were successful in their bid for the Garaf field in southern Iraq.

Subject: RE: BS: Iraq Oil Bids
From: Q (Frank Staplin)
Date: 30 Dec 09 - 03:38 PM

The oil giant of the west, Alberta, has had more oil sands areas put under development.
(supplement to post of 03 Dec 09)

Petrochina has invested $1.8 billion in the MacKay and Dover fields, for a 60% interest in these Athabaska Oil Co. leased fields. Both contain billions of bbls. of recoverable reserves from the oil sands. Chinese companies are looking for more oil sands opportunities.
The Kearl oil sands, Imperial Oil (Exxon-Mobil), notice of development previously announced, is under active development.

The Cold Lake oil sands field (Imperial Oil) has joined two other oil sands fields that have produced over one billion bbls. The others are owned by Suncor (a Canadian company) and Syncrude (a consortium of Imperial Oil, Suncor, Conoco, and Mocal (Japanese).

As previously noted, the Alberta government estimates actual oil sands production costs at $35.00/bbl; current prices over $75.00/bbl. offer ample opportunity for large profit.

In Iraq, the Angolan company has announced that it will proceed with development of its field near Mosul, despite continued terrorist activity in the area.