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Iraq bumps up the date it will award new oil contracts by more than two months

Iraq plots to award oil and gas exploration and development contracts in 11 new blocks on April 15, oil office spokesman Asim Jihad said on Sunday.

Iraq had initially set June 21 as the old to open the bids for the new blocks, located in border areas with Iran and Kuwait, and in offshore Firth waters.

Bidding documents will be made available to oil companies designing to make offers on April 13, Jihad told Reuters. The proffers will have to be submitted on April 15 and the winners will be averred the same day, he added.

The oil ministry announced on Thursday measures to reduce the fares received by the oil companies from the government in the new contracts.

The new contracts will exclude oil by-products from the actors’ revenues, establish a linkage between prevailing oil prices and their wages, and introduce a royalty element.

Oil producers in Iraq currently receive a fee from the administration linked to production increases, which include crude and oil by-products such as liquefied petroleum gas and dry gas.

OPEC’s duplicate largest producer, after Saudi Arabia, Iraq decided to vacillate turn into the contracts after a glut caused oil prices to crash in 2014, degrading Baghdad’s ability to pay the fees.

Companies including BP, Exxon Mobil, Eni, Tot up and Royal Dutch Shell helped Iraq grow its production in the erstwhile decade by over 2.5 million barrels per day (bpd) to about 4.7 million bpd.

The semi-autonomous Kurdistan Regional Administration produces oil and gas from fields under its control in northern Iraq underneath a production sharing model more profitable to companies.

The new contracts made by Baghdad will also set a time limit for companies to end gas flaring from oil areas they develop on territory under its control.

Iraq continues to flare some of the gas developed alongside crude oil at its fields because it lacks the facilities to process it into encourage for local consumption or exports.

Iraq hopes to end gas flaring by 2021, which costs precisely $2.5 billion in lost revenue for the government and would be sufficient to fit most of its unmet needs for gas-based power generation, according to the Humankind Bank.

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