ITOCY Itochu Corp (PK)

Iraq has postponed by a month its fourth oil-and-gas bidding round, to April 11-12, when it will auction 12 promising exploration blocks to international companies, a senior Oil Ministry official said Wednesday.

It had previously said that the fourth auction would be held March 7-8.

"We have decided to delay...in response to requests from companies to give them more time to study conditions of the licensing round and the draft contract model," Abdul Mahdy al-Ameedi, head of the Oil Ministry's Petroleum Contracts and Licensing Directorate, told Dow Jones Newswires.

Ameedi said that 37 international firms, including some of the world's largest, have paid participation fees and bought data packages for the 12 blocks. He named only two of nine firms that didn't buy these packages--Japan's Itochu Corp. (8001.TO) and TNK BP Holding (TNBP.RS).

Some 46 energy companies have qualified to participate in the bidding round, which is expected to add 29 trillion cubic feet of gas and 10 billion barrels of oil.

The ministry will make some slight changes to the draft model contract after receiving requests from companies.

"The main provisions of the service contract will remain as they are, but we may make slight changes to other provisions," Ameedi said, without elaborating. He said the final model contract will be ready in February.

Prequalified companies will compete based on fees that they will charge for exploring in these untouched blocks. One category will be allowed to bid as operators for the blocks; a second category will be allowed to participate in consortia led by operators.

Although international companies would prefer production-sharing contracts for exploration blocks, Iraqi oil officials said the deals would be based on a service contract, which means winning companies will be paid a flat fee for their services rather than be given a share in the resources. But it would be slightly different from the 20-year service contract offered in the previous three bidding rounds, they said.

Among those qualified for the auction are BP PLC (BP), Royal Dutch Shell PLC (RDSA), ExxonMobil Corp. (XOM), Lukoil Holdings (LKOH.RS), Total SA (TOT), China National Petroleum Corp., or CNPC, Eni SpA (E), Occidental Petroleum Corp. (OXY) and Chevron Corp. (CVX).

Seven of the blocks are believed to contain natural gas, and five are believed to contain crude oil, and the blocks range in size from 5,500-9,000 square kilometers, officials said.

Iraq holds the world's fourth-largest oil reserves. Its estimated gas reserves of 112.7 trillion cubic feet are the world's 10th largest, according to U.S. Department of Energy data.

-By Hassan Hafidh, Dow Jones Newswires; +962 799 831 831; hassan.hafidh@dowjones.com

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