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Iraq's VP Hashemi to boycott oil tenders
June 29, 2009 / 12:38 PM / 8 years ago

Iraq's VP Hashemi to boycott oil tenders

* Vice president: reservations about deals

* Urges oil minister to let parliament study bids

By Ahmed Rasheed

BAGHDAD, June 29 (Reuters) - Iraqi Vice President Tareq al-Hashemi will boycott an auction on Tuesday to award contracts for eight oil and gas fields, saying parliament needs more time to study the country’s first major oil tender since 2003.

Some of the world’s biggest energy firms, including Exxon Mobil (XOM.N), Total (TOTF.PA) and Royal Dutch Shell (RDSa.L), are competing to develop the six oilfields and two gas fields in the tender, which has drawn opposition from some legislators.

“There are many existing reservations over this vital issue concerning Iraq’s oil resources,” Hashemi said in a letter, posted on his website, to Oil Minister Hussain al-Shahristani.

He urged the minister to “hold off on awarding bids to the winning companies and give parliament enough time to study these bids,” said the letter, released by Hashemi’s office.

    Iraq has the world’s third largest proven oil reserves, estimated at 115 billion barrels, and Tuesday’s tenders will unveil the war-battered nation’s first major oil round since the U.S. sent troops six years ago to topple Saddam Hussein.

    The government wants to boost oil production, which at 2.3-2.4 million barrels per day is lower than before the war.

    But the opening of Iraq’s oil sector has pitted Arabs against northern Iraq’s minority Kurds, who are signing their own contracts in defiance of Shahristani, and have prevented the passage of modern hydrocarbon legislation.

    Senior officials in Iraq’s state-run industry, meanwhile, have opposed auctioning fields already in production. Officials on the provincial council in the southern city of Basra have also called for an opportunity to review any deals.

    Winners among the 32 firms competing will pay $2.6 billion in signature bonuses and carry Iraq’s 25 percent share of development costs, which Baghdad will pay back over time in oil.

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