The auction is taking place for the first time since Iraq nationalized its oil industry more than 30 years ago. Among top potential bidders are Exxon Mobil Corp., Royal Dutch Shell PLC, Italy's Eni SpA, Russia's Lukoil and China Petroleum & Chemical Corp. If all goes according to plan, the new contracts with foreign companies will help Iraq to stabilize six developed fields which have suffered because of the war.
Oil Minister Hussain al-Shahristani has expressed his commitment to staying on the deal despite lawmakers' concerns of legality of the contracts - believed by the parliament to have highly favorable terms for the foreign companies.
According to Wall Street Journal, the oil deal could be key to stablizing Iraq's economy and to its proposed plans to boost oil output from the current 2.4 million barrels a day to 4 million. The companies themselves, are also reported as being eager to receive the contracts due to Iraq's relativly unexplored reservoirs, with some considering the nation as the most important opening of petrolium fields in years. Only about 20 out of the known 80 oil fields have been developed.
Al-Shahristani has stated that the companies with the lowest rates and highest potential profit for Iraq will receive the contracts, according to the article.
Approximately 120 companies were interested in bidding. The contracts will last 20 years and the winning companies will begin work in November.