Iraqi Oil Minister Hussein al-Shahristani said Sunday that an auction of three gas fields originally scheduled for September 1 was being reviewed and may be delayed because a contract model has not yet been finalized.
"The date of the event is currently being reviewed and we will announce it," Shahristani told reporters at the ministry.
Although Iraq has 111 Tcf of natural gas reserves, it has never fully exploited its gas resources, focusing instead on its 115 billion barrels of crude oil reserves. Most of Iraq's gas production is produced in association with crude oil and large volumes are flared because the country has no infrastructure to cope with the gas.
Earlier this year the ministry said it would follow two oil auctions held last year with a gas bidding round, offering three non-associated gas fields -- Akkas in the western Anbar province, Mansuriyah in the northern province of Diyala and Siba in the southern province of Basra -- for development by foreign oil and gas companies.
Shahristani said Sunday that the contract terms for the gas auction had not yet been finalized. Iraq has so far awarded 20-year technical service contracts for the development and further development of 11 oil fields.
He said the qualified companies were not encouraged by Iraq's plan to take the gas produced from the three fields. Shahristani has said that Iraq would only export any surplus gas once domestic requirements are met.
An August 1 roadshow in the Turkish city of Istanbul with the 45 pre-qualified international oil companies as well discussions outside that event will produce the final document, Shahristani said.
Among options being considered now is for half the gas produced to be used locally and for the other half to be exported.
At issue though is how exactly companies would be paid for the gas.
Under the long-term service contracts for the oil developments, the companies get cost-recovery plus a remuneration fee per barrel for additional oil produced.
The Akkas and Mansuriyah gas fields were offered in the June 30, 2009 auction, along with six oil fields but only Akkas, located near the Syrian border in a province that used to be the base for al-Qaida, received a bid.
The government rejected the bid from a consortium led by Italy's Eidson for a remuneration fee of $38/barrel of oil equivalent against a maximum of $8.50/ boe set by the ministry.
Siba was initially included in the second oil auction held in December but was withdrawn shortly before the bidding.
Meanwhile, a plan to develop Iraq's currently flared gas in Basra province has not yet been finally approved. The council of ministers gave it an initial nod, but so far details between the ministry's South Gas Company and partners Royal Dutch Shell and Mitsubishi to create a joint venture to capture the associated gas being burned currently in Basra have not been ironed out.
Shahristani also said Iraq was discussing possible exports of Iraqi gas with the EU.
"We are studying with the EU a deal to provide EU markets with Iraqi gas as well as Asian markets," he said.
"The date of the event is currently being reviewed and we will announce it," Shahristani told reporters at the ministry.
Although Iraq has 111 Tcf of natural gas reserves, it has never fully exploited its gas resources, focusing instead on its 115 billion barrels of crude oil reserves. Most of Iraq's gas production is produced in association with crude oil and large volumes are flared because the country has no infrastructure to cope with the gas.
Earlier this year the ministry said it would follow two oil auctions held last year with a gas bidding round, offering three non-associated gas fields -- Akkas in the western Anbar province, Mansuriyah in the northern province of Diyala and Siba in the southern province of Basra -- for development by foreign oil and gas companies.
Shahristani said Sunday that the contract terms for the gas auction had not yet been finalized. Iraq has so far awarded 20-year technical service contracts for the development and further development of 11 oil fields.
He said the qualified companies were not encouraged by Iraq's plan to take the gas produced from the three fields. Shahristani has said that Iraq would only export any surplus gas once domestic requirements are met.
An August 1 roadshow in the Turkish city of Istanbul with the 45 pre-qualified international oil companies as well discussions outside that event will produce the final document, Shahristani said.
Among options being considered now is for half the gas produced to be used locally and for the other half to be exported.
At issue though is how exactly companies would be paid for the gas.
Under the long-term service contracts for the oil developments, the companies get cost-recovery plus a remuneration fee per barrel for additional oil produced.
The Akkas and Mansuriyah gas fields were offered in the June 30, 2009 auction, along with six oil fields but only Akkas, located near the Syrian border in a province that used to be the base for al-Qaida, received a bid.
The government rejected the bid from a consortium led by Italy's Eidson for a remuneration fee of $38/barrel of oil equivalent against a maximum of $8.50/ boe set by the ministry.
Siba was initially included in the second oil auction held in December but was withdrawn shortly before the bidding.
Meanwhile, a plan to develop Iraq's currently flared gas in Basra province has not yet been finally approved. The council of ministers gave it an initial nod, but so far details between the ministry's South Gas Company and partners Royal Dutch Shell and Mitsubishi to create a joint venture to capture the associated gas being burned currently in Basra have not been ironed out.
Shahristani also said Iraq was discussing possible exports of Iraqi gas with the EU.
"We are studying with the EU a deal to provide EU markets with Iraqi gas as well as Asian markets," he said.
