20 October 2000 Baghdad’s politically motivated bid to replace the US dollar with the beleaguered euro as its currency for international transactions – including oil sales – could become reality. There is a precedent: Libya has been receiving oil payments in currencies other than the dollar for some time, and in euros occasionally, since the start of this year. Provided the Iraqi oil pricing formula is calculated in dollars –…
Nouri Al-Maliki
Q. The Iraqi government took several decisions to proceed with the development of Iraq’s oil resources and to invite international oil companies to help develop oil fields, but no contracts have been awarded to date. Why is that?
A. There is more than one reason for the delays but the most important one is the lack of security that has been prevailing until recently. The security situation was not conducive to our own companies, let alone international companies, playing a role in development. This also applies to companies in other sectors related to the reconstruction of Iraq. This was normal at a time when Al-Qaeda and those who supported it created a situation where no one could enter Iraq, which meant that we could not achieve our goals in the oil and non-oil sectors. But we see more interest now from foreign companies following successes by the government in enforcing security and stability. All those companies that hesitated to come are now competing for the different oil contracts. And although we are happy with the licensing round announced recently and the interest expressed by international oil companies in competing for those contracts, we have decided in the council of ministers [this week] that we need to speed up the process and reduce the complications of the contracting process.
Hussein Al-Shahristani
The Iraqi oil minister talks oil with Ruba Husari:
Q. You launched your first licensing round Jun. 30 with an ambitious schedule to award contracts by June 2009. In view of Iraq’s problems, is this timetable realistic?
HS: It is ambitious, but we are talking about producing fields, where production profiles and other data are already available, and most of the international companies that intend to bid for those fields have a lot of data, so the time required to familiarize themselves is much shorter than if we were talking about non-developed fields. We think one year is enough. We gave the companies six months to prepare their bids and we told them to start preparing from now. Iraq lost big investment opportunities in the last five years as a result of the security situation and political differences. We cannot afford to waste any more time, and we aim to complete this process within a year. We will also launch a second licensing round before the first one is completed. Once the data packages are out in September and while companies prepare their bids, which are due in March 2009, we will have time to prepare for the launch of the second round.