JUNE 22, 2009, 12:43 P.M. ET
2nd UPDATE: Iraqi Oil Workers Demand Bid Round Cancellation
(Adds oil minister to brief parliament Tuesday on bidding round.)
AMMAN (Dow Jones)--The oil workers' union in the oil hub province of Basra in southern Iraq Monday demanded the government cancel the country's upcoming auction of contracts to develop oil fields.
"We are demanding Prime Minister Nouri al-Maliki intervene personally to prevent the award of these contracts," said a statement issued by the union, a copy of which was e-mailed to Dow Jones Newswires.
In Baghdad, Oil Minister Hussein al-Shahristani confirmed in a television interview late Sunday that the government was going ahead with plans to award eight oil and gas fields to international companies, as scheduled, June 29-30. "[Companies] will submit their offers June 29 and 30, and they will be opened immediately," Shahristani told the state-run al-Iraqia television.
Shahristani is expected to appear before parliament Tuesday to defend the country's first auction of oil fields in the last three decades, Assem Jihad, the Oil Ministry spokesman told Dow Jones Newswires by telephone from Baghdad.
"The minister and senior officials at the petroleum contracts and licensing directorate will brief lawmakers and answer their questions to remove any misunderstanding on the first bidding round," Jihad said.
Some lawmakers have called for the delay or the cancellation of the bid round, arguing that they weren't acquainted with the draft contracts that the ministry planned to award to international companies. The auction is one of two bidding rounds. The first is to develop Iraq's six largest oil producing fields and two untapped gas fields.
The second is for non-producing oil and gas fields, which are expected to be awarded at the end of this year.
The Oil Unions' Federation based in Basra, which produces the bulk of Iraqi crude oil said in the statement that they can develop the six oil fields without the 20-year-long service contracts that the ministry is planning to award to international companies. "Our national employees are able to develop these fields without the help of these foreign companies," the statement said.
Shahristani disagrees. "We don't have the finance and the ability to develop these fields depending on our engineers," the minister said on al-Iraqia television.
The head and some senior officials of the South Oil Co. in southern Iraq - the location of most of the oil fields that the government is planning to award to foreign companies - last week voiced their opposition to the bidding round.
-By Hassan Hafidh, Dow Jones Newswires; + 962 799 831 831; firstname.lastname@example.org