WAR: First Iraqi Post War Oil Contracts Awarded

Iraq's Oil Ministry has awarded the first oil field contracts, post war, to Canada and Turkey. The contracts will be for construction of new pipeline and building gas separation stations. Unlike post election contracts that will probably be negoiated, the current contractors will not remain as operators of the sites they contruct.



Two things come to mind with this story. The first is "Is this a sign of things to come for the Iraqi oil fields?" I'm wondering if there will be more international involvment in the oil production and sales of oil world-wide. If this is the case could it help, even in a small way, ease some of the tention aimed at the U.S. that their war in Iraq is indeed just for oil.

The second thing that comes to mind is, "Is this simply a smoke-screen to try to lessen the anger at the U.S.?" I can see how the U.S. would want to deflect some of the ire felt by much of the world that the U.S. is only there for the war. The U.S. could have the Iraqi's award the first dozen or so contracts to other countries as a show of capitulation but in reality be waiting for the big oil fields to open up.

My thought is that is a little of both. I think the U.S. is honestly trying to allow the Iraqi government an opportunity to act on their own and make their own decisions. By awarding contracts to countries other than the U.S. the Iraqi's are trying to show that they are independent and will make their own decisions. I also think the U.S. is "guiding" the Iraqi's away from U.S. money to start with to show that it isn't strong-arming itself from the beginning. This will be interesting to see how it plays out.

I don't know anything about Everasia but it seems that Shell turned down the chance to develop the field because of poor terms being offered:

gasandoil.com
09-07-04 European oil giant Shell has turned down the chance to win the first foreign upstream oil production contract in post-war Iraq, saying the terms on offer from Baghdad's new interim government were not good enough. Despite security concerns, Shell told it considered bidding for production work on the billion-barrel Khurmala Dome field in northern Iraq.
"We obtained a copy of the tender but the scope and contract format are not compatible with our aspirations for long-term risk-reward contracts," a Shell spokesman said.

Typically oil majors like to secure a 15-20 % return on 25-30 year contracts. Since the war ended last May work by foreign contractors in Iraq's vast oilfields, the world's second largest, has been limited mostly to short-term infrastructure repair contracts led by companies like US Halliburton.

IMO that they were going to give them all to haliburton, but decided that maybe it would be just a little to obvious... They may think were stupid, but they know we aren't brainless.
I do hope that this mediates some of the worlds criticism.