The first round of bidding for the right to develop oil fields in Iraq is not going as planned. All of trades would charge for the barrel, the Iraqi government is considered too high. As a result, the Iraqi government held an auction for the second time, this time making it clear that it would not consider a fee higher than $ 2.00 per barrel. (Also, the winner has to make $ 500 million to the Iraqi Ministry of Oil.) Only one application was accepted: a consortium of companies formerly known as British Petroleum (now BP), China National Petroleum Corporation (CNPC), and Iraqi public-South oil company. Consortium earlier bid $ 3.99 for the same region. Now had to negotiate the actual terms of the contract with the Iraqi government. In addition, leaders in London and Beijing to decide whether it makes sense to exercise the option, they just bought. Will they waste money by investing in the super-giant Rumaila field at such a low fee per barrel, whether strategic returns down the line? "Hide
by Noel Maurer, Soghomon Tarontsi Source: Harvard Business School 4 pages. Publication Date: September 21, 2009. Prod. #: 710016-PDF-ENG
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