Iraq's Petroleum Contracts and Licensing Directorate (PCLD) sent a semifinal version of the model contract to the bidding companies. They have to answer with their comments by April 1, and the PCLD will issue its final model servicing contract and resend it to them between April 15 and April 17.
The PCLD has made several changes to the original model contract which was first issued in November last year, Abdul Mahdy al-Ameedi, deputy director general at PCLD reported.
The most important change that was made to the original model contract is that oil firms would have a 75% stake in the joint ventures with state-owned Iraqi operators at the fields holding the rest. That was up from 49-51% equity stake initially proposed.
Big oil companies prefer deals that give them a share of profits and allow them to book reserves.
The initial model contract stated firms should bid on the cost per barrel of maintaining the same output over 20 years, and the cost per barrel of raising output. Oil companies would recover their costs from oil they pump above the baseline.
Author: Kochneva Ksenia
