Iraq
must invest in natural gas processing and transport infrastructure
before awarding contracts for three major gas fields, company executives
said here on the sideline of a two-day Oil Ministry roadshow.
"The export term of the licensing auction is confusing," a
company executive told Dow Jones Newswires.
Iraqi oil officials believe they are enticing companies by
allowing them to export half of the produced gas, while participating
firms view this as a "negative condition."
The huge amount of gas expected to be produced from these
fields, estimated at 900 million cubic feet a day, may prove a major
obstacle for the successful companies as Iraq
lacks the infrastructure to treat, process, store, transport and export
gas.
"We don't know which market we would export the gas to,"
another company executive said.
The three fields on offer are Akkas in Anbar province, which
the Oil Ministry puts at 5.6 trillion-cubic feet; Mansouriya in Diyala
with 4.5 trillion-cubic-feet of reserves; and Siba in Basra with 1.13
trillion-cubic-feet reserves.
Iraq
currently produces only 1.65 billion cubic feet a day, of which some
700 million cubic feet is flared and the rest goes to meet domestic
consumption.
Gas from Akkas can be exported through Syria, which is only
40 kilometers away, but Iraq
hasn't built yet the infrastructure to facilitate this.
Siba is near Kuwait, which is currently importing more costly
gas from global companies. Privately-held Kuwait Energy has been
pre-qualified by the Iraqi Oil Ministry to take part in the bidding
round, and many expect it to be interested in Siba.
Mansouriya would be used to meet local consumption, according
to people familiar with the situation.