Iraq grants only one oil block at auction 

(MENAFN) Iraq granted one out of six possible new oil and gas blocks to foreigners on Wednesday, as the country offered an auction to help build up its energy sector after years of war and destruction, reported Reuters.

Foreign companies made no offers on the first four gas and oil blocks, but a joint venture led by Kuwait Energy and their partners Turkey's TPAO along with Dubai-based Dragon Oil garnered a deal to explore Block 9, an oil rich area in Basra near Iran's Azadegan oilfield. The consortium offered a remuneration fee of USD6.24 per barrel of oil equivalent.

The director of the Iraqi Ministry's contracts and licensing directorate said: "We believe the contracts serve the interests of the companies and Iraq. But they have a different view," and "That is why only one block was awarded."

Iraq currently has the fourth-largest oil reserves and the tenth-largest gas reserves in the world. They were left unexplored and underdeveloped for years and now they are being tapped into again, leaving a great deal of potential to unexplored territory.

Six blocks are set to be auctioned of Today (Thursday May 31, 2012). A senior company executive commented to Reuters asking not to be identified due to the sensitive nature of these negotiations commented that: "With tough gas contract terms, and all the other risks around these blocks, we don't expect much interest from companies."