The Iraqi Oil Minister Hussein Al-Shahristani has said the country will likely drop oil service contracts with foreign companies if they don’t have their proposals finalized by a June deadline and will move forward with the work on its own.
“June is already a bit late… We may drop them if they aren’t signed soon ( after June),” Shahristani told journalists.
He didn’t specify whether he was referring to all contracts or those targeting specific fields that individual companies are vying for.
The purpose of the short-term contracts is to help increase oil production capacity by about 500,000 barrels a day over a six to 12-month period until a competitive bidding process is held this summer and longer term agreements are reached, Shahristani said.
Shahristani said Iraq would hold its first oil bidding round this summer since the fall of Saddam Hussein five years ago.
Although he said Iraq “will get the bulk of the profits” from all contracts signed with foreign companies, which also will be subjected to an oil windfall profits tax, critics of the controversial oil law disagree.
They say that much of the power and therefore money will be given to the international oil companies.
This debate looks set to run and run…