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Iraq oil contract renegotiations begin

The Oil Ministry is seeking to align IOC incentive structures with tight fiscal realities, but is not considering a switch to industry-favored production sharing contracts.
Iraqi oil officials lead the first bidding round of technical service contracts on June 30, 2009. (THAIER AL-SUDANI/Reuters)

BAGHDAD - As Iraq begins to renegotiate its contracts with international oil companies, the Oil Ministry is unlikely to allow a full transition to the production sharing contract (PSC) model often favored by the industry.

Oil Minister Adil Abd al-Mahdi said he does want to improve the existing technical service contracts (TSCs) to better harmonize the incentives of the companies and the government, and to ensure that all sides share equitably in both the risks and rewards of oil price swings.

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