-Caveat Lector-
 
US invites bids for major new Iraq oil contracts
Thursday, 10-Jul-2003 4:40PM      Story from AFP / David Williams
Copyright 2003 by Agence France-Presse (via ClariNet)

WASHINGTON, July 10 (AFP) - The US Army has solicited bids for two Iraqi oil contracts worth up to a billion dollars, replacing a lucrative deal awarded to Halliburton in March, documents showed Thursday.

The US Army Corps of Engineers said it would issue one contract for the fields in the north of Iraq and another for the south, each worth from 500,000 dollars to a maximum 500 million dollars.

The work is open to US and eligible foreign companies, replacing a hotly-disputed contract doled out to a subsidiary of Halliburton -- a company run by US Vice President Dick Cheney from 1995 to 2000.

The Army Corps of Engineers had come under fire over its granting of the Iraqi oil contract on March 8 to Halliburton subsidiary Kellogg, Brown and Root (KBR) without putting it out to bid.

The Corps argued that the KBR contract was simply an emergency bridge to a longer-term contract to be put out to tender.

The new "requests for proposals" were published on the Internet late Wednesday.

The contracts run for 24 months, with three one-year options extending to a maximum 60 months.

They cover extinguishing oil well fires, environmental assessments and cleanups, engineering design and construction, pipeline and refinery maintenance, procurement and importation of fuel, distribution of fuel products in Iraq, and technical assistance, the Corps said.

One contract is to support the North Oil Company and the other the South Oil Company.

"The government's preference is that the two contracts will be awarded to different contractors, one for the north and one for the south," the government solicitation document said.

To be eligible, foreign firms must either qualify for the business under existing US trade legislation, or they must be from countries in the US-led coalition that ousted Saddam Hussein, the papers show.

Contracts would be awarded according to whether they provide best value to the government.

The price will depend on the cost of the work done, with fees paid to the winning companies on top of that.

Government funds had yet to be approved for the projects.

The US administration in Iraq is requesting an extra 800 million dollars from Congress to rebuild the oil industry, a senior coalition official in Baghdad said.

Congress had already earmarked 400 million dollars to repair the fields, but faced with blown up pipelines, looting, and refineries and equipment in worse shape than previously thought, the US boss for Iraq Paul Bremer is asking an additional 800 million, the official said on condition of anonymity.

The US Army Corps of Engineers said the price range for the new contracts was based on current damage estimates and its plan to use Iraqi workers and Iraqi capabilities "to the maximum extent possible."

A "pre-proposal conference" -- Restore Iraqi Oil -- would be held at a hotel in Dallas, Texas, on July 14 to present an overview of the contracts, including sessions with an expert panel and a press conference, it said.

The closing date for proposals was August 14.

Getting large-scale oil exports up and running from Iraq is deemed essential to coalition efforts to rebuild the country in order to use export profits to fund the huge cost of reconstruction.

Iraq is to put eight million barrels of crude up for tender to foreign oil companies by the end of July, a senior Iraqi official from the State Oil Marketing Organisation told AFP in Baghdad on Monday.

djw/aln

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