Register for our free newsletter

Latest News

Iraq wants to alter signature bonus for Rumaila

Soft loans need parliamentary approval, official says.

July 20, 2010 1:29 by

Iraq’s Oil Ministry has asked British oil major BP and Chinese partner CNPC to turn their signature bonus for Rumaila oilfield into an unrecoverable but lower payment rather than a soft loan, an Iraqi official said on Tuesday.

“We have asked from them (BP and CNPC) to convert the $500 million recoverable to $100 million unrecoverable… in line with the rest of the contracts,” Abdul-Mahdy al-Ameedi, director of the Oil Ministry’s licensing office, told Reuters.

“If it stayed as a soft loan, we have to get parliament’s approval for it, and there is no (functioning) parliament right now,” he said.

In January, BP and CNPC paid a $500 million signature bonus due on the contract they won to develop Iraq’s 17-billion-barrel supergiant Rumaila oilfield.

Iraq held a general election in March that produced no outright winner and as yet no new government. Parliament has held its first session but is not functioning in the absence of a new government.

Iraq agreed in April to slash signature bonuses on two oilfield development deals and turned them into unrecoverable payments rather than soft loans.

The signature bonus for the 8.7-billion-barrel West Qurna Phase One oilfield to be paid by Exxon Mobil and Royal Dutch Shell was cut to $100 million from $400 million.

The bonus for the 4-billion-barrel Zubair oilfield won by Italy’s Eni and its partners Occidental Petroleum Corp and South Korea’s KOGAS was cut to $100 million also, compared with $300 million previously.

The oilfield development deals are among a series Baghdad signed with international oil companies that could boost Iraq’s output capacity to 12 million barrels per day from 2.5 million bpd now, giving Iraq the billions it needs to rebuild.

Tags: , , ,

Leave a Comment