By Maher Chmaytelli
BAGHDAD, April 26 (Reuters) - Iraq failed to attractinvestment from oil majors in its oil and gasexploration/development contract auction on Thursday, with nomajor companies winning any bids and only Italy's Enimaking one.
The Oil Ministry held an auction to award contracts tointernational energy companies, with 11 blocks on offer near theborders with Iran and Kuwait and in offshore Gulf waters.
"We have decided to speed up the development of borderfields after five decades without investments ... leaving themwithout investments meant wasting the oil wealth of thecountry," Oil Minister Jabar al-Luaibi said ahead of bidding.
"I say to the companies (that will bid), 'thank you' becausethis means trusting Iraq ... and it means services and educationfor the citizens who live in the regions where you are going tooperate," he added.
Five of the exploration blocks failed to attract any bids.Three went to Iraqi-owned, United Arab Emirates-based CrescentPetroleum, two to China's Geo-Jade, and one to United EnergyGroup, also based in China.
Eni made one unsuccessful bid, while no other majors bid.Fourteen companies had expressed interest in the contracts andbought a package containing the bidding documents and terms forthe 11 blocks, the ministry had said on April 14.
"It is a very successful round. As an Iraqi company it's nota commercial matter, it's about investing and developing theproduction of Iraq," Crescent executive director Abdullahal-Qadi told Reuters.
The blocks were initially to be auctioned in June. The datewas brought forward to April 15, then postponed to April 25 togive bidders more time, the oil ministry had said.
A combination of factors was behind the failure by fiveblocks to draw bids, said Abdul Mahdy al-Ameedi, directorgeneral of Iraq's Petroleum Contracts and Licensing Directorate.
Some cover former battlefields, some are hard to access andthe one offshore plot needs more data, he said.
Ameedi said another round could be held for the five blocksbut provided no further details.
The contracts on offer excluded oil by-products from thecompanies' revenue, established a link between prevailing oilprices and their remuneration, and introduced 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 decade by over2.5 million barrels per day to about 4.7 million bpd.(Reporting by Maher Chmaytelli; Writing by Ahmed Aboulenein;Editing by Dale Hudson and Jason Neely)
