Iraq Adds $2.5 bln Signature Bonus to Oil Contracts

April 28, 2009
(Arabian Business News ) - Iraq wants international oil companies to pay almost $2.5 billion more than they previously expected, to work on some of its biggest oilfields, according to an official Iraqi document.

Baghdad wants oil firms to pay a total of $2.6 billion in signature bonuses for the contracts on offer in a bidding round to work on six oilfields and two gas fields, according to a copy of the tender document obtained by Reuters on Monday.

The new figure was nearly 16 times the initial demand for signature bonuses of around $164 million, according to Reuters calculations.

"That was the biggest shock in the document," said one executive at an oil company planning to bid. "It really came out of the blue and was a big slap in the face."

The final document calls for a signature bonus of $500 million alone for work on the giant Rumaila oilfield, Iraq's largest. The initial contract called for a payment of around $55 million.

The bidding round is Iraq's first since the US-led invasion of Iraq in 2003.

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