Iraq delays oil auction after late contract tweaks

Bloomberg

Iraq delayed an international auction of rights to 11 of its oil and natural gas deposits, pushing back the bidding date after introducing changes to the contract, according to people familiar with the matter.
The oil ministry re-scheduled the auction for April 25, said one of the people, who asked not to be identified because the information isn’t public. International ene-
rgy companies will still particip-
ate in the bidding because the prospect of prodigious crude reservoirs outweighs the new contract’s lack of clarity, analysts at Wood Mackenzie Ltd. and the Iraq Energy Institute said.
Oil Ministry Spokesman Asim Jihad said by phone from Baghdad that he was unaware of any postponement in the auction, originally set for April 15.
The ministry said last month it was changing to a new “hybrid” type of oil-rights contract.
Iraq invited companies including Eni SpA and Lukoil PJSC to bid for the rights to explore and develop fields along its borders with Iran and Kuwait. Under the original schedule, many if not all of the 16 potential bidders — oil majors as well as smaller energy companies — would have had only two days to review a draft of the ministry’s new contract before the auction, according to Luay Al Khatteeb, executive director of the Iraq Energy Institute, a research organization based in Baghdad.
“Everyone will be interested, but they have to check if the contract is favorable for investment,” Al Khatteeb said by phone from London.