iraqi dinar value - Iraq Oil “Drill Baby Drill” part 2

Iraq Oil “Drill Baby Drill” part 2

This last February 2009 Iraq Drilling Co. signed and completed the creation of joint venture with the British Mesopotamia Petroleum called Iraq Oil Service Co. (IOSCO).




This new company will purchase twelve drilling rigs as well as secure drilling contracts in the fields controlled by South Oil Company (SOC), Oil Exploration Company (OEC), Missan Oil Company (MOC) and Northern Oil Company (NOC), all state owned organizations in Iraq.



IOSCO will be drilling at least 60 drills per year. These activities should bring a 120,000 barrels increase in the country’s daily oil production during the first year. The first fields where there will be new drills are Fakka, Bazargan and Halfaya.



Iraq Drilling Co. and Mesopotamia Petroleum, which hold 51 percent and 49 percent of the joint venture respectively, decided to invest $400 million in the new company. As part of this investment, Mesopotamia Petroleum will supply the joint venture with integrated methods and technologies aimed at boosting production.



An oil drilling tender was held on December 31, 2008, where 35 international firms joined. In April 2009, the Ministry of Oil announced a list of nine investors selected to participate in the negotiations for drilling contracts, including KazMunaiGaz (Kazakhstan), Rosneft and Tatneft (Russia), PetroVietnam, Pakistan Petroleum, Sonangol (Angola), Jogmec (Japan), Cairn Energy Plc (UK) and Oil India.



The winning bids were announced at the end of June 2009. Winning bidders will be awarded service contracts under which Baghdad will pay them a certain fee, and offer production sharing contracts which would involve the sharing of profits.



Despite the Ministry of Oil’s efforts to bring international investments to Iraq, contractors remain sceptical on the country’s ability to complete the implementation of these projects. The problems lay not in money or security issues, but the process of decision making, as Iraq’s government is still not stable and solid.



The country’s inability to complete the implementation of contract procedures has been a long-term saga putting obstacles in the rehabilitation of the oil industry. Back in 2004, Weatherford, a US company, had won a contract for 60 wells which was never completed. Yes, that was 5 years ago, we will see if the massive amount of new contract agreeements get drilled out.



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Article may be reprinted online and offline as long

as this box remains and hyperlinked online. Written

by Darren Chabluk for http://DrDinar.com/blog

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