Article

2008-06-20 Iraq

Iraq is preparing to allow four of the biggest western oil companies to renew exploitation of the country's vast reserves for the first time in almost four decades.

Iraq's oil ministry stepped up talks with BP, Exxon Mobil, Shell and Total after the US vice-president, Dick Cheney, visited Iraq in March, where he also pressed the government to revive efforts to pass the hydrocarbon law that nationalist MPs were blocking. The first contracts are expected to be signed this month. Some 90% of Iraq's budget comes from oil revenues.

Iraq's oil minister, Hussain al-Shahristani, told the Guardian this week that the deals did not amount to the privatisation of the country's oil. But the four companies are heirs to the consortium given the concession to control Iraq's oil by King Faisal, the foreign Sunni Arab whom the British imposed on Iraq's majority Shia population after occupying the country during the first world war. They lost their right to explore new fields in 1961 after the monarchy was overthrown, and nationalisation followed under the Ba'ath party.

There was no competitive bidding for the concessions, which are to be awarded to the four giants plus Chevron and some smaller companies. After the US-led invasion in 2003 the companies supplied advisers and trainers to the oil ministry for free in the hope of getting a foot in the door. The Russian company Lukoil did the same but lost the contract for Iraq's largest undeveloped field to Total and Chevron. Chinese and Indian firms also lost out.

Posted by Fred 2008-06-20 00:00|| || Front Page|| [11136 views ] Top

#1 Interesting. A large slice of modern world's ills can be traced back to OPEC countries nationalization of oil reserves and the failure of the West to enforce the oil companies property rights. Which itself stemmed from Suez, when the Americans didn't support Britain and France.*

Now Iraq is going to invite them back in. This looks like we are going to see a belated alternate history. Wholly, a good thing IMO.

* In case anyone interprets this as USA bashing. The US did the wrong thing in the Suez Crisis for (arguably) the right reasons - they thought national sovereignty trumped private property rights.

Posted by Phil_B 2008-06-20 01:05|| 2008-06-20 01:05|| Front Page Top

#2 I think it was more not wanting to be seen or shown by the USSR to be supporting Europeans in the reimposition of their colonial power over the newly independent 3rd world. At the same time as the uprising in Hungary. Ike wasn't going to get in a war over either. Many bad things have happened in the name of anti-colonialism, especially ending it.

It's hard to remember how different we were from the Europeans then.

The Iraqi move should prove positive and set an excellent example for the future.

Posted by Nimble Spemble 2008-06-20 07:36|| 2008-06-20 07:36|| Front Page Top

#3 Ike was a good President but he made his worst foreign policy mistake--possibly America's worst ever--by not backing Britain and France at Suez.

His worst domestic mistake was appointing Earl Warren. Both have had tremendously bad consequences for America and the rest of the West.

Posted by Thaimble Scourge of the Pixies4707 2008-06-20 11:50|| 2008-06-20 11:50|| Front Page Top

#4 I always wondered who the UK and France had in mind to run and defend the canal.

Naw, Ima funning you, I know exactly who they had in mind for that little task.

Austria!

Posted by George Smiley 2008-06-20 17:34|| 2008-06-20 17:34|| Front Page Top

#5 George,

I inquired once about some FO documentation that should have listed who the Eden government anticipated would lead Egypt after retaking the Canal. I found it was classified under the 75 year rule and thus won't be seen until 2031.

Posted by Thaimble Scourge of the Pixies4707 2008-06-20 19:42|| 2008-06-20 19:42|| Front Page Top

#6 I am most interested to learn the size of Iraq's reserves after modern methods of assessment & exploration are used.

Posted by Anguper Hupomosing9418 2008-06-20 22:05|| 2008-06-20 22:05|| Front Page Top

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