BAGHDAD, April 23 (Reuters) - Iraq will hold an auction toaward exploration and development contracts to internationalenergy companies on Thursday, the oil ministry said in astatement.
Iraq is offering 11 new blocks for exploration in borderareas with Iran and Kuwait and in offshore Gulfwaters.
Fourteen companies have expressed interest in the biddinground, the oil ministry said on April 14.
Oil companies' offers will be received at a ceremony at theoil ministry starting at 10 a.m. (0700 GMT) on Thursday and theauction results will be announced later in the day, the ministrysaid in its statement on Monday.
It is the third time the auction date has been changed. Theblocks were initially to be auctioned in June, but the date wasbrought forward to April 15, then postponed to April 25 to givebidders more time, the oil ministry said at the time.
Last month the ministry announced measures to reduce thefees paid to oil companies in the contracts to be auctioned.
The new contracts will exclude oil by-products from thecompanies' revenue, establish a link between prevailing oilprices and their remuneration, and introduce a royalty element.
Oil companies operating in Iraq currently receive a fee fromthe government linked to production increases, which includecrude and oil by-products such as liquefied petroleum gas.
OPEC's second-largest producer after Saudi Arabia, Iraqdecided to change the contracts after a glut caused oil pricesto crash in 2014, reducing Baghdad’s ability to pay such fees.
Companies including BP, Exxon Mobil, Eni, Total, Royal Dutch Shell and Lukoilhave helped Iraq expand production in the past decadeby over 2.5 million barrels per day (bpd) to about 4.7 millionbpd.
The semi-autonomous Kurdistan Regional Government producesoil and gas from fields it controls in northern Iraq under aproduction-sharing model that is more profitable to companies.
The new contracts offered by Baghdad will also set a timelimit for companies to end gas flaring from oilfields theydevelop.
Iraq continues to flare some of the gas extracted alongsidecrude oil at its fields because it lacks the facilities toprocess it into fuel.
Iraq hopes to end gas flaring by 2021. Flaring costs thegovernment nearly $2.5 billion in lost revenue each year andcould meet most of its unmet needs for gas-fired power,according to the World Bank.(Reporting by Maher Chmaytelli; editing by Jason Neely andSusan Fenton)
