Successful Bids Attract Foreign Investment in Iraq’s Hydrocarbons
Expertise contributed to industry landmark eventsAfter years of turmoil, the Republic of Iraq’s economic recovery largely depends on the development and production of the country’s large petroleum resources. The Ministry of Oil’s Petroleum Contracts and Licensing Directorate (PCLD) engaged Gaffney, Cline & Associates to provide technical, commercial, and managerial assistance for the purpose of undertaking three successive competitive and transparent international licensing rounds.
The first Petroleum Licensing round offered mainly developed oil fields, including super giants such as Rumaila with estimated reserves of 17 billion barrels and 2008 production of 1,000,000 barrels per day. The second was mainly undeveloped oil fields, including two fields with reserves in excess of 10 billion barrels. The third, three undeveloped gas fields, with estimated in place gas volume in excess of 11 trillion cubic feet. (Source: EIA)
Gaffney, Cline & Associates provided comprehensive support and training to the PCLD throughout the bidding process, leveraging extensive experience in the highly specialized field of advising “sovereigns” (governments, ministries, national oil companies) on the management of their petroleum sectors. As an initial step, Gaffney, Cline & Associates prepared data packages for the interested companies to evaluate the potential of the fields on offer, on the basis of the available well files, logs, maps, well reports, fluid, test analyses, and more.
Gaffney, Cline & Associates also assisted the PCLD in the definition of tender protocols and of contractual terms appropriate to Iraq’s laws, culture, and institutional capacity. In addition, Gaffney, Cline & Associates created economic models evaluating the cash flows of all the parties involved in the offered service contracts on the basis of projected field (re)development costs and production profiles.
Gaffney, Cline & Associates organized the licensing promotional campaign, which included multiple roadshows, workshops, and press communications. These events contributed to generating interest from major oil and gas companies and contributed to developing a communications framework allowing all parties to ensure that their essential investment requirements were addressed.
Finally, support was provided to the Ministry of Oil in defining bid assessment criteria and in carrying out three bidding events held in Baghdad and broadcasted live on national television. Gaffney, Cline & Associates’ expertise and support were instrumental in attracting foreign investments in Iraq through these successive petroleum licensing rounds. Gaffney, Cline & Associates have been a trusted advisor to the Ministry of Oil since 2007.
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