Iraq Oil, Gas Auctions Get Lukewarm Response

Iraqi government has managed to sell exploration rights to only three of 12 oil and natural gas exploration blocks in a two-day energy auction. The auction ended Thursday.

AFP reported that the two day sale, the first to invite international oil companies to explore Iraqi territory for energy deposits since the 2003 US led invasion concluded with 8 plots receiving no bids whatsoever including two that were offered to foreign firms twice.

Thursday’s bid opened with Pakistan Petroleum winning 6,000 square kilometer exploration block which is thought to contain gas covering Diyala and Wasit provinces in central Iraq with the company agreeing to $5.38 per barrel of oil equivalent eventually extracted, AFP said.

Also, Russian energy giant Lukoil and Japan's Inpex won a contract for a plot covering Muthanna and Dhi Qar provinces in the south believed to hold oil with an offer of $5.99 per barrel of oil.

A consortium led by Kuwait Energy that also includes Turkey's TPAO and Dubai based Dragon Oil won the 900 square kilometer block in the southern province of Basra for a service fee of $6.24 per barrel of oil.

Expers say that the dissapointing response to the auctions was due to government's tough conditions imposed.