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Glencore, Vitol set to bid for Iraq oil fields

Baghdad, September 8, 2011

The upstream growth plans of the world's two biggest oil trading companies took a big step forward on Thursday as Iraq pre-qualified Glencore and Vitol to bid for billions of barrels of oil exploration rights next January.

The Iraqi oil ministry confirmed on Thursday a Reuters report late on Wednesday that the Swiss-based commodity trading giants, both with big upstream expansion plans, are among six new companies pre-qualified bidders for 12 exploration blocs which expected to add 10 billion barrels to Iraqi reserves.

The world's biggest oil explorers have been queuing up to tap Iraq's vast and largely underdeveloped oil fields, with its huge reserves offsetting fears over security and infrastructure challenges in a country crippled by years of war.

Although few expect Iraq to meet its target of increasing its production capacity from under 3 million barrels per day (bpd) in 2011 to a Saudi-Arabia rivalling 12 million bpd in 2017, there are now 46 companies vying for the licenses to try.

Glencore has equity stakes in oil and gas production sharing contracts offshore Equatorial Guinea, West Africa with the first expected to start producing early next year and peak at 50,000 bpd, according to the company website.

Shares in Glencore , whose shares have fallen since it listed in London in May, jumped more than 6.5 percent on Thursday morning on favourable bond news and Iraq oil prospects.

Unlisted Vitol has exploration and production assets in the Former Soviet Union, Southeast Asia and West Africa but its net production is only just over 8,000 bpd, according to its website.-Reuters




Tags: Vitol | Iraq | Bid | Oil fields | Glencore |

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