Thursday, June 19, 2008

Mission Accomplished: Western Oil Companies Set To Return To Iraq

Andrew Kramer in the New York Times:
Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.

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.

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.
Weapons of mass destruction? Complicity in the attacks of 9/11? Central front in the Global War on Terror? Or just the best hope for a large-scale increase in oil production?

Oh well, what's the difference? Or, as Andrew Kramer puts it:

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.
Yeah, that's it. There was suspicion. But there's no suspicion anymore, right?

Well, it doesn't matter. Or it soon won't.
While small, the deals hold great promise for the companies.

“The bigger prize everybody is waiting for is development of the giant new fields,” Leila Benali, an authority on Middle East oil at Cambridge Energy Research Associates, said in a telephone interview from the firm’s Paris office. The current contracts, she said, are a “foothold” in Iraq for companies striving for these longer-term deals.
And so it goes. Business is business, and oil is oil, and we have to fight them over there so we don't have to fight them over here.

It's not that you'll believe anything; it's just that your neighbors do.
[i]n a twist of corporate history for some of the world’s largest companies, all four oil majors that had lost their concessions in Iraq are now back.

In an interview with Newsweek last fall, the former chief executive of Exxon, Lee Raymond, praised Iraq’s potential as an oil-producing country and added that Exxon was in a position to know. “There is an enormous amount of oil in Iraq,” Mr. Raymond said. “We were part of the consortium, the four companies that were there when Saddam Hussein threw us out, and we basically had the whole country.”
They'll have the whole country again, from the look of things. No matter how many Americans -- and no matter how many Iraqis -- have to die.