Iraq Launches Bidding Round 5-Plus

19 May 2023 Issue: 66 / 20 By: Yesar Al-Maleki

Baghdad is capitalizing on the February ratification of its 2018 fifth licensing round by introducing an ‘annex’ comprising 13 more mostly-modest exploration blocks. But majors are expected to shy away given past experience with Iraq and its unfavourable terms, which means the round could be dominated by Chinese and mid-sized firms.

Since its ratification of the 2018 fifth licensing round (LR5) contracts last February (MEES, 24 February), Iraq has been floating the idea of another bidding round. Now, it has taken the plunge, with the oil ministry announcing on 15 May that 13 blocks (see table) are on offer as part of what it coined the “Fifth Licensing Round Annex (5+).” The ministry has marked 15 June as deadline for interested oil and gas companies to submit pre-qualification requests. Those already qualified for LR5 and previous rounds are automatically prequalified.

Like LR5, the LR5+ round will focus on exploration blocks and Baghdad appears keen to test whether its Exploration, Development and Production Contract (EDPC) model will generate better interest than it did in 2018 (MEES, 10 March). Yet, even if this round is less rushed than the previous LR5 one, the limited profitability terms and concerns over Iraq’s stifling bureaucracy will likely keep many majors away. (CONTINUED - 1779 WORDS)