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Low oil prices and the fight against Islamic
State have forced Baghdad to delay billions of dollars of cash
payments which it owes to international oil companies (IOCs), so
they have been allowed to take oil shipments instead.
Michael Townshend, BP's president in the Middle East, said
current total production from Iraq's giant Rumaila field was
about 1.4 million barrels per day and was expected to remain
steady in 2015.
"In terms of the position we have on Rumaila, the payments have
picked up and I'm comfortable where they are," he told reporters
in Abu Dhabi.
"We get paid by liftings...either out of Ceyhan or out of the
south...We certainly got more liftings in the last couple of
months." He did not give details of the liftings.
BP has also extended an agreement with Iraq's Ministry of Oil to
help arrest declining production at the huge northern Kirkuk
oilfield, Townshend said. Kirkuk is currently disputed between
the central government in Baghdad and Iraq's Kurdish region.
"We had a letter of intent, which was for a year, and we
extended that until the end of this year because there was a
time last year where we couldn't do anything productive."
Under the deal, BP works on the Baghdad-administered side of the
border with the Kurdish region, on the Baba and Avana geological
formations. Kirkuk's third formation, Khurmala, is controlled by
the Kurdistan regional government.
BP, along with other IOCs, is in talks with Baghdad over the
technical service agreements under which they develop Iraq's
southern fields. Investments in the fields are made by the
foreign firms, which are then supposed to receive per-barrel
fees.
But low oil prices have made this arrangement difficult for the
financially strapped Baghdad government. Iraq's finance minister
told Reuters in March that Baghdad was planning to change the
way it operated exploration and production contracts with
companies such as Royal Dutch Shell, BP and Exxon.
This may eventually move Iraq for the first time to
production-sharing contracts, in which revenues are divided,
from service contracts in which oil firms are paid a set fee.
Townshend said IOCs had presented the Ministry of Oil with some
proposed amendments to their contracts.
"They've asked for our ideas - they've asked all the IOCs for
ideas," he said, declining to comment on whether the ministry
had responded.
(Reporting by Rania El Gamal and Maha El Dahan; Editing by
Andrew Torchia)
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