Pertamina withdraws from Iraq tender

PT Pertamina Hulu Energi, the subsidiary of state owned oil and gas firm PT Pertamina has withdrawn itself from the tender for oil and gas fields in Iraq, saying the tender terms were not interesting.

?We withdrew at the last minute because (the contract terms) are not feasible economically. This is because they (Iraqi government) use the service contract scheme,? Dwi Martono, Director of International Business at PT Pertamina Hulu Energi, said on Wednesday.

Dwi explained that many other bidders also withdrew their bids.

Reports say the Iraqi government had offered eight contracts to investors but only one found buyer.

The Iraqi government offered the service contracts rather than production sharing contracts which all the bidders favor. Under the service contract, a contractor would get a fixed fee for each barrel. Under a production-sharing contract, an oil company would recoup its costs and then be entitled to a proportion of the oil extracted, instead of being paid a fixed fee for each barrel. (Godang)