Iraq sees little interest in latest auction

Iraq began its fourth energy auction since the start of the war that toppled former dictator Saddam Hussein in 2003, but so far has seen little interest, according to Bloomberg.

Unlike the previous three auctions, which sold the rights to previously explored oil reserves or existing production capacity, the latest round looked to sell the rights to new oil exploration in the country.

However, only one of the six initial proposals garnered a successful bid, a deal to explore an area along the Iranian border that was won by a Kuwaiti energy consortium. One of the remaining projects was ultimately withdrawn after a British group rejected the price set by the Iraqi government, according to The Associated Press.

"Expectations were low going into this as the terms were so fundamentally unsuitable, but I am slightly surprised by how bad the turnout was," Samuel Ciszuk, a consultant at KBC Energy Economics, told Bloomberg. "Service contracts are just not flexible - to have a set fee when you don’t know what’s underneath the ground or how big the reservoir is. Production sharing agreements would be the classic option for an exploration round."

PennEnergy's Research area offers analyses of the oil exploration and production market in Iraq.

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