This change will for the first time encourage Iraq to enter into production-sharing contracts, in which revenues are distributed as a percentage of service contracts, for which oil companies receive a fixed royalty. In both the TSCs and the DPSCs, the contractor is only entitled to recover his costs and collect his compensation costs if he meets the eligibility criteria set out in the agreement; where certain costs defined as “additional costs” (which generally include signing bonuses, the costs of remediation of existing environmental conditions and demining, as well as the costs of certain facilities in accordance with the TSC or DPSC) can be recovered more quickly. For SCs, eligibility criteria are met either when they reach a specified level of production over a 30-day period, or after the expiry of a certain period (usually three years) after the approval of a recovery plan, while for DSCS, the eligibility criteria are similar, with the exception of the obligation that generally falls to the contractor. , instead of reaching a certain level of production or production. to get commercial production first. In both contracts, the eligibility criteria for cost coverage and compensation royalties provide a strong incentive for the contractor to achieve production targets as quickly as possible. Dublin, February 14, 2019 (GLOBE NEWSWIRE) — The Iraq Upstream Fiscal and Regulatory Report – Sector Challenged by Regulatory Uncertainty and Tough Fiscal Terms has been added to ResearchAndMarkets.com`s offering. Iraq Upstream Fiscal and Regulatory Report – Sector Challenged by Regulatory Uncertainty and Tough Fiscal Terms, presents the essential information relating to the terms that govern investment into Iraq`s upstream oil and gas sector. The report details the contractual framework in which companies are required to operate in the sector and clearly defines the factors that influence profitability and quantifies the state`s exception to hydrocarbon production. Taking into account political, economic and sectoral variables, the report also analyses future trends in the upstream investment climate of oil and gas in Iraq. In April 2018, Iraq held its fifth round of licences based on a new model version of service contracts launched in recent weeks. However, with these new service contracts, the government is among the highest in the world, which is why the series of offers has had mixed results with only 6 blocks of 11 offers on offer and no major international oil companies among the winners.
In March 2018, Parliament passed a law that still needs to be implemented by the government, with the aim of completely reforming the governance of Iraq`s oil sector, but the regulatory outlook remains uncertain. The most important element of the legislation would be the reinstatement of the Iraqi national oil company, which would be responsible for oil contracts in Iraq and would be the holding company that controls the regional Iraqi oil companies. Scope Zebari said Baghdad would not press Gulf Arab OPEC countries like Saudi Arabia to cut production to lift oil prices. “Now it`s best for us to have production-sharing contracts. We are negotiating with all ESEs (international oil companies),” he said. The federal government has come, in real circumstances, to rethink that income distribution is the best thing to do. Iraq is a member of OPEC and has announced that it will begin meeting OPEC production quotas in the near future, although it has not yet been necessary to determine when it will begin to comply and the production quota to which it would be subject.