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FACTBOX-Details on bidding for Iraqi oilfields

Published 12/11/2009, 11:22 AM

(Corrects figure in paragraph 7 to 1.405 million)

Dec 11 (Reuters) - Iraq's Oil Ministry on Friday awarded service contracts to international oil companies to develop two of the country's biggest oilfields, part of the second bidding round for oil deals since the 2003 U.S.-led invasion.

Royal Dutch Shell, Europe's biggest oil company, and Malaysia's state-run Petronas together won the contract for the supergiant Majnoon field. A consortium made up of China National Petroleum Company (CNPC), Total of France and Petronas won a deal to run the giant Halfaya.

Two of the fields -- East Baghdad and the Eastern Fields -- offered on Friday failed to attract any bids, while sole bidder Sonangol of Angola and the Oil Ministry failed to reach agreement on a third, Qayara. The ministry will take bids on five more fields on Saturday.

For further cover of the auction, please see Here are the details from Friday's bidding:

* MAJNOON

Shell and Petronas' winning bid for the field in southern Iraq included a proposed remuneration fee of $1.39 per barrel and a plateau production target of 1.8 million barrels per day (bpd). Majnoon currently produces 45,900 bpd.

Total and CNPC offered the only other bid: $1.75 per barrel and an output target of 1.405 million bpd.

The Oil Ministry's minimum plateau production target was 700,000 bpd, according to a protocol for the tender.

After the deal is ratified, Shell must pay a non-refundable signature bonus of $150 million, according to the tender protocol. The agreement also requires it to invest a minimum of $300 million. The fee just to participate in the bidding for Majnoon was $500,000.

* HALFAYA

CNPC led the consortium, which included Petronas and Total, that won the contract for this giant field in southern Iraq, which currently produces 3,100 bpd. They proposed a fee of $1.40 per barrel and targeted plateau production of 535,000 bpd.

Partners LUKOIL of Russia and Oslo-based Statoil offered $1.53 per barrel and a target of 600,000 bpd.

India's ONGC led a venture, in which TPAO, Turkey's state-run oil company, and Oil India also held stakes, that proposed a fee of $1.76 per barrel. Their plateau production target was 550,000 bpd.

A fourth bid came from a consortium led by Italy's Eni. It said it would take $12.90 per barrel and produce 400,000 bpd. Eni owned a 30 percent stake in that venture, while South Korea's KOGAS and U.S.-based Occidental owned 20 percent each and Sonangol of Angola and China's CNOOC each owned 15 percent.

Halfaya's non-recoverable signature bonus is $150 million and the minimum expenditure obligation is $200 million, the protocol said. The participation fee was $500,000.

* EASTERN FIELDS

This cluster of four fields -- Khashm al-Ahmar, Naudoman, Gulabat and Qamar -- failed to attract any bids. Volatile Diyala province has been plagued with violence and some of the areas are disputed with Iraqi Kurds.

The fields have estimated reserves of 300 million barrels, and the minimum production requirement is 80,000 bpd.

The signature bonus is $100 million and the minimum expenditure obligation is $150 million. The fee to participate in bidding was $350,000, according to the tender protocol.

* EAST BAGHDAD (CENTRAL AND NORTH)

No companies bid for this supergiant located adjacent to an impoverished Baghdad district called Sadr City. Some firms may have been deterred by its vulnerability to attack or by its low-quality crude.

With reserves of 8.1 billion barrels, it currently yields 10,300 bpd, and the Oil Ministry had sought a minimum plateau production target of 250,000 bpd.

East Baghdad's signature bonus is $150 million, as is the minimum investment requirement. The protocol called for a participation fee of $500,000.

* QAYARA

Despite being the only bidder, Sonangol, Angola's state-owned oil company, failed to win this contract after proposing a remuneration fee of $12.50 per barrel. It declined to lower that to $5, the maximum Iraq was willing to pay.

Sonangol's production target was 120,000 bpd, in line with the ministry's minimum target.

Qayara is located in Nineveh province, one of the most dangerous places in Iraq. It is plagued by insurgent violence and criminal networks, which may have been a reason for the low level of interest.

The signature bonus is $100 million, and the minimum expenditure required is $150 million. The participation fee was $350,000, according to the protocol. (Compiled by Ayla Jean Yackley, editing by Anthony Barker)

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