Iraq's first auction for unexplored oilfields since the second Gulf war could lose out on bidders because of the terms, which one multinational described as "not ideal".
An estimated 10 billion barrels of oil deposits are up for grabs in an auction set for early next year. But the contract model says companies will be paid in dollars rather than being rewarded with a share of the crude they find. Such terms are not designed to motivate drilling, say industry executives.
"They are not conventional terms for exploration. Some people would even say these are not ideal terms for exploration," said Elias Kassis, the managing director for Iraq exploration and production at the French oil giant Total. "We're currently looking at the technical aspects as well as the contractual model to evaluate risk and reward."
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