News, June 2008
Lucrative Iraqi Oil Contracts to Exxon Mobil, Shell, Total, and BP, No Contracts for Chinese, Russian, and Indian Companies
4 western oil companies in final stages of signing deals in
Four Western oil companies are in the final stages of negotiations
this month on contracts that will return them to Iraq, the International
Herald Tribune newspaper said on Thursday.
"The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations," it also said.
"The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production," the newspaper explained.
"There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq's Oil Ministry," according to the paper.
"The Iraqi government's stated goal in inviting back the major
companies is to increase oil production by half a million barrels per
day by attracting modern technology and expertise to oil fields now
desperately short of both. The revenue would be used for reconstruction,
although the Iraqi government has had trouble spending the oil revenues
it now has, in part because of bureaucratic inefficiency."
It said the companies had been chosen because they had been advising the ministry without charge for two years before being awarded the contracts, and because these companies had the needed technology.
A Shell spokeswoman hinted at the kind of work the companies might be
engaged in. "We can confirm that we have submitted a conceptual proposal
to the Iraqi authorities to minimize current and future gas flaring in
the south through gas gathering and utilization," said the spokeswoman,
Marnie Funk. "The contents of the proposal are confidential."
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