The opening round of bidding on the rights to extend Iraq's oil field didn't go as proposed. All the command groups desired to charge a fee per barrel the Iraqi government considered too high. Consequently, the Iraqi government conducted the auction a second time, this time making it clear that it would not contemplate fees above $2.00 per barrel. (In addition, the winner desired to deposit $500 million with the Iraqi oil ministry.)
The Future of Iraq Project (B) case study solution
The consortium had formerly offered $3.99 for the same domain. It now had to negotiate the actual conditions of the contract with the Iraqi government. In addition, the executives in London and Beijing needed to determine whether it made sense to exercise the option they'd just bought. Would they be throwing good money after bad by investing in the Rumaila super-giant field at this type of low fee per barrel, or would there be strategic returns down the line?
PUBLICATION DATE: September 21, 2009 PRODUCT #: 710016-PDF-ENG
This is just an excerpt. This case is about GLOBAL BUSINESS
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