Foreign Oil Giants Bid on Iraq's Resources

Iraq Government Holds Auction for Foreign Contracts on Oil, Gas Fields for 1st Time in 30 Years

(CBS/AP)  Iraq opened up some of its massive oil and gas fields to foreign firms on Tuesday, kicking off a landmark licensing round it hopes will help fuel its postwar reconstruction efforts.

In a televised ceremony, international oil companies were invited to submit bids for six oil and two gas fields, a process that marked their return to the country over 30 years after Saddam Hussein nationalized the oil sector and expelled the foreign firms.

The licensing round coincided with Iraq's assuming formal control over its cities - a defining step toward ending the U.S.'s combat role in the country. That has raised worries about a new escalation of violence that could complicate business for oil companies, already concerned about some lawmakers' objections to the bidding process.

Iraqi Prime Minister Nouri al-Maliki sought to allay companies' concerns, telling executives from the more than 30 international firms vying for the 20-year service contracts that the government would do all it can to secure their interests.

Al-Maliki said the government would "offer security protection, offer all guarantees for their investments and offer all the facilities needed to ensure the success of this process."

The fields on offer hold about 43 billion of Iraq's 115 billion barrels of crude reserves - among the largest in the world.

The process seemed to run into difficulties for the first two fields on offer.

Two consortiums submitted offers for the Rumaila oil field, which holds 17.8 billion barrels in crude reserves. British giant BP PLC and China's CNPC made up the first consortium while U.S. giant Exxon Mobil and Malaysia's Petronas comprised the second.

Under the service contracts, the companies would be paid a per barrel fee for any crude they produce in excess of a minimum production target.

Both groups were asked to revise their bids, said Oil Minister Hussain al-Shahristani, because they were asking for more money per barrel than the government wanted.

No bids were offered on the second field on offer, Mansouri.

The field, located in the restive Diyala province, is an undeveloped gas field estimated to hold 3.3 trillion cubic feet of reserves with production potential of 330 million cubic feet a day. That province has weathered some of Iraq's worst violence.

Iraqi officials have estimated that based on crude oil at $50 per barrel, the companies could earn around $16 billion in total while Iraq would bring in over $1.7 trillion.

The process, however, has been mired in controversy linked to Iraq's ethnic and sectarian political divides. Lawmakers opposing the licensing round say the contracts would be unconstitutional since the parliament will not be allowed to ratify them.

Al-Shahristani has said he wants the cabinet of ministers to approve the deals instead, and that the process will be completely transparent.

But much of the ire basically stems from the country's various groups vying for a slice of the oil revenue, with the Kurds in the semiautonomous north particularly disgruntled at the central government's insistence that the deals they signed earlier with international oil companies are illegal.

Further complicating the effort is the lack of a national oil law. Some analysts have said this could leave oil companies vulnerable to having their contracts voided by a subsequent government.

As part of the contracts, the companies have to provide so-called "soft-loan" signature bonuses to the government which total about $2.6 billion.

Al-Shahristani seemed to touch on those concerns at the start of the ceremony, saying that "we will face a number challenges, and all parties will need to work hard to overcome them."

[OregonJames]

The end result of the Bush/Cheney unsuccessful oil grab will be that the US will be a great loser in the oil fields and the US economy will suffer heavily in the short term for the gamble that was taken.

Fortunately, their incompetence has made an energy revolution absolutely critical to our survival as a nation, and the energy revolution will make our nation grow much stronger because of our reduced dependence upon oil from the middle east. We will be more secure. Our earth and our skies will become cleaner, and we will live more energy efficient lives as we become reliant upon the wind, sun, and tidal forces for our energy.

It is ironic, but the greed, arrogance, and utter incompetence of the Bush/Cheney administration may in the end be one of the best things that has happened to America since the invention of electricity.

[chonder2]

Yea, I get the point but the invasion was supposed to be about terrorism.Saddam the John Gotti of the mideast, was supposed to be in league with his close friends the fanatical terrorists. Hell Saddam was more westernised than I am. What about that yellow cake? Where are the aluminum tubes? What Africa meeting? Why was Scooter Libby penning all the Bush staff speeches? Why did half of the CIA intel officers have broken arms? Why? Find out who has an interest in bids on this Iraq oil. Can you say... Cheney,Bush,Wolfmister, Rumsfelt?

[geminispyder-2009]

So let me get this straight.... thousands of American lives and countless American dollars spent on a war so that other countries whose population hated the US for going into Iraq get to bid for the same oil paid in American blood?

[/sarcasm] NICE! [/end sarcasm]

[elpaulito]

Great job of exporting american style "democracy". Corruption, greed, evil.

[antoniof123]

Way to go neocons mission accomplished.

[hungry1968-15]

This will be the REAL start of the Iraqi civil war.

And religion will keep it fueled for a long, long time.

[abbe91]

Nothing surprising ... this was published in 2005:

http://www.independent.co.uk/news/world/middle-east/iraqs-oil-the-spoils-of-war-516400.html

I think it says it all.

[zonkzilla]

I bid over 4,300 brave American lives, 200,000 Iraqi civilian lives, and over three trillion dollars of my tax money for the Iraqi oil.
The Iraqi oil is special, it is tinted red.

[speakinup22]

Zonk-zilla, you need to make sure you stay in school instead of skipping classes.

Did we, or did we not leave Kiwait after kicking Saddam out ?


If we had just wanted oil - wouldn't Kiwait be the 51st state ?


You really are stupid.

[zonkzilla]

Like Cheney said, the deaths of all those American troops are not in vain.
Anyone who does not think the Iraq war was fought for the oil companies is out of touch with reality.
Even now Cheney is saying American troops should stay in combat and not pull back so Halliburton can continue to make billions in profits in Iraq.

[speakinup22]

Hey dipstick.... Gasoline is approaching $3 a gallon and oil is at $67 a barrel - HALF the price of when Dubya was in office.

Are you telling us that Barry is ALSO supporting the oil companies ?

What a dip you are!

[ajjaxtheleast]

MISSION ACCOMPLISHED!

[mcintoshlou]

Why Iraq is Now the Most Corrupt Country on the Planet

By PATRICK COCKBURN

"I paid $800 to get my job,? says Ahmed Abdul, a technician working for Karada municipality in Baghdad. ?People know this is wrong, but there is no way round it.? In Iraq corruption is pervasive at every level.

?Corruption exists all over the world but is at its worst here,? laments Ateej Saleh Midhat, a 26-year-old employee of the state-owned Rafidain Bank. ?In 2008 and 2009 it was difficult for any graduate to have a job without paying $500 to $1,500 according to what kind of job it was. But what about the people who cannot afford to pay??

Iraq is the world?s premier kleptomaniac state. According to Transparency International the only countries deemed more crooked than Iraq are Somalia and Myanmar, while Haiti and Afghanistan rank just behind. In contrast to Iraq, which enjoys significant oil revenues, none of these countries have much money to steal.

HECK OF A JOB YOU LOYAL REPUBLI'CON' BUSHIES

[speakinup22]

Another idiot that needs reality explained to them...

Hey liberal - how long do yo think it took the US to create the Constitution after the War of independence was over ?

Did we have the necessary laws overnight ?

Do you think the Iraquis are a little more stressed than we were after our independence ?

Sheese - whata freekin idealist !





On another note - It would be nice if the Iraquis decided to put aside a percentage of their oil profits to show a little gratitude towards getting rid of Saddam.