Iraq wants to review contracts with oil companies to cut the fees that the firms receive when crude prices are low, the OPEC nation’s new oil minister said, standing by a demand made by his predecessor.
Oil Minister Jabar Ali Al-Luaibi conveyed his position at a meeting on Monday in Baghdad with BP’s head in Iraq, Michael Townshend, the ministry said in a statement.
The minister also discussed increasing oil and gas output from BP’s giant Rumaila field in southern Iraq.
Iraq was in talks with foreign oil companies to link the fees they charge for developing their fields to oil prices and have them share the burden when markets go down, former oil minister Adel Abdul Mahdi told Reuters in January.
Iraq generates 95 percent of its public budget from oil sales. It has service agreements with companies including CNPC , BP, Shell, Eni, Exxon Mobil and Lukoil, which get paid for the extra barrels produced at fields awarded to them through a bidding process.
Current service agreements with oil companies are straining Iraq’s budget as the government pays them a fixed fee for increasing production at ageing fields. Its own revenue dropped as oil prices have more than halved compared to 2014.