Bidders vie to fix oil fields in Iraq

Foreign and domestic companies yesterday bid on more than $1 billion in contracts to repair Iraq’s oil fields, though most of the work sponsored by the U.S. government likely will go to Houston-based Halliburton.

The Bush administration tasked the Army Corps of Engineers with putting out oil fires after major combat ended in the U.S.-led war, and later repairing oil fields damaged by years of neglect and ongoing sabotage.

Halliburton, which Vice President Dick Cheney once led, won the initial no-bid contract to extinguish oil-well fires through subsidiary Kellogg Brown & Root, which has worked closely with the Army to evaluate and repair oil fields.

The corps, which relies on private contractors to execute projects, last month laid out a three-phase plan totaling $1.14 billion to return Iraq to prewar oil production by the end of March. But the first phase will be complete and the second well under way when the newest contracts awarded in mid-October.

The first phase of contract work is the heftiest, valued at $716 million. It is scheduled for completion by Sept. 30. The second phase, valued at almost $251 million, should be completed by Dec. 31, and parts of it are up for grabs.

Phase three is the practical target for bidders. It is valued at $176 million, a small portion of the total oil award before the corps hands over contracting and repair responsibilities to the Iraqi Oil Ministry.

Despite the dwindling amount of contract work, companies are not complaining publicly and some see a chance to enter a potentially lucrative market.

The two, two-year contracts, one for northern and one for southern fields, have been put at between $500,000 and $500 million.

“That’s the big mystery: How much work will be in those contracts,” said Bob Faletti, a corps spokesman.

Companies bidding for the work are assuming it wall fall on the low end.

“The scope [of the contracts] has been reduced, but there is still some amount of work likely to be necessary between now and the time an Iraqi entity becomes responsible,” said Jerry Holloway, spokesman for Fluor, an Aliso Viejo, Calif.-based company that bid on the work with a British partner.

“And we know that the work being done under the corps is really just the beginning of a much longer process that will be necessary to modernize the Iraqi oil and gas infrastructure,” he added.

Parsons, an engineering firm with headquarters in Pasadena, Calif., partnered with an Australian firm to bid.

“Our team decided to go ahead and to bid given uncertainties and security issues. It would be a strategic win for our company,” said Erin Kuhlman, a Parsons spokeswoman.

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