Big Oil’s big dreams are close to coming true as Iraq’s Oil Ministry prepares deals for the country’s largest oil fields with terms that aren’t necessarily what companies were hoping for but considered a foot in the door of the world’s most promising oil sector. Iraq’s proven oil reserves are only smaller than those in Saudi Arabia and Iran — and the country is only about 30 percent explored. Iraq produces about 2.4 million barrels per day, a recent increase from the 2 million bpd post-invasion average, but far below what its reserves could handle. Its oil sector is suffering from decades of Saddam Hussein-era mismanagement, U.N. sanctions and the effects of the current war.
The decision of how to develop a resource that provides for nearly the entire federal budget is political and controversial. To each side’s alarm, the national government will rely on a Saddam-era law and Iraq’s Kurdish region is signing deals on its own. Details of negotiations between the ministry and international oil majors are being kept quiet, though media are picking up on pieces of deal-making. MarketWatch reports executives from BP and Shell were to meet with Oil Minister Hussain al-Shahristani following Wednesday’s meeting of the Organization of Petroleum Exporting Countries in Abu Dhabi. The global energy information firm Platts reports top ministry and company officials are to meet in Amman this week.
Shahristani himself dropped hints to United Press International in a recent interview. He said he’s moving forward with oil deals despite the lack of a new national oil law, a draft of which has been stalled in negotiations for more than a year. "This has nothing to do with the national oil law. There is no timeline. Whenever we finish our discussions we’ll just sign the contracts," he told UPI on the sidelines of the OPEC heads of state summit last month."This is basically technical-support contracts," he said, adding the contracts will not be the result of a bidding process. "Selected companies will offer us technical support that we need to develop our producing fields." Develop producing fields? "Yes, only." …
"…being kept quiet." Why, I wonder? Every awake, alert human on Planet Earth knows that from Dick Cheney’s "energy conference" two weeks after he was inaugurated, the trajectory for oil exploration in Iraq by American Oil Companies has never faltered. All but the most naive know that the motor running the Niger forgery debacle, the War, the Plame outing, the prolongation of the war, the huge new U.S. Embassy, the denial of Global Warming, the "Surge," etc. has been the oil beneath Iraq’s Deserts. So why keep it quiet? It’s the loudest thing happening in our world. And it looks like they’re going to bring it off before they go out of office. Recall that Halliburton announced recently that it’s moving to Dubai. Coincidence? Not likely. Look for a lot more of this kind of muted announcement in the next 332 days [see the left sidebar].
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