Iraq’s oil ministry said on Wednesday it had initialled contracts to develop 13 exploration blocks and oil and gas fields.
The ministry added that the exploration agreements could increase production by 750,000 barrels of crude and 850 million standard cubic feet of gas.
Oil officials said Iraq particularly wanted this licensing round, the country’s sixth, to boost production of natural gas, which it wants to use to power power plants that rely heavily on imported gas from Iran.
Oil Minister Hayan Abdul Ghani said in a statement that increasing gas production could allow more flexibility in supplying power plants.
The contracts, which were initialled on Wednesday, were awarded in a bidding round held in May and dominated by Chinese companies.
An oil ministry official who attended the signing ceremony said they would be profit-sharing contracts that provide a share of revenues after deducting royalty fees and cost recovery expenses.
“We have adopted profit-sharing contracts instead of service contracts in order to encourage and attract more investments in the energy sector in Iraq,” added the official, who spoke on condition of anonymity because he was not authorized to speak to the media.
Traditional technical service contracts offer a fixed fee for the work performed and are likely to be less profitable for foreign investors than the terms of profit-sharing contracts.
In the bidding round held in May, which included 29 oil and gas projects, Chinese companies won 10 of the oil and gas exploration fields and blocks on offer.
