 Iraq opens door to foreign oil firms
(China Daily)
Updated: 2008-07-01 07:57 Iraq threw open the world's third largest oil reserves to foreign firms yesterday, putting British and US companies in poll position five years after US-led troops invaded the country to oust Saddam Hussein. The move to invite bids for the development of Iraq's largest oilfields will mark the return of the oil majors, whose cash and technical expertise Iraq needs to restore its oil infrastructure that has been hard hit by sanctions and war. But any awards to US and British firms are likely to anger opponents of the invasion, who have said the 2003 war was designed to give Western oil companies control over Iraqi oil reserves. US and British officials have denied the charges. By allowing international firms to help raise output at its major oil fields, the Iraqi government is breaking with the policy of major oil-producing neighbors such as Saudi Arabia, Kuwait and the United Arab Emirates whose national firms keep tight control of foreign investment in their oil sectors. "The six oilfields that have been announced today are the backbone of Iraq's oil production, and some of them are getting old and production is declining," Oil Minister Hussain al-Shahristani told a news conference. He listed the areas as Rumaila, Kirkuk, Zubair, West Qurna Phase 1, Bai Hassan and Maysan - which comprises three separate fields: Bazargan, Abu Gharab and Fakka. 41 firms prequalified The Oil Ministry said they were open for long-term development contracts. Iraqi has prequalified 41 foreign firms. Shahristani said he hoped contracts could be signed in June 2009 to raise output by a combined 1.5 million barrels per day at those fields. He added that Iraq aimed to raise output to 4.5 million bpd by 2013 from the current 2.5 million bpd. He also said the foreign bidders must take on a local partner with a minimum 25 percent stake in the deal; and that any firm that wanted to bid must open an office in Baghdad. Currently, few foreign companies have any presence in Iraq because of the security situation. Iraq said last week it also hopes to sign six short-term oil service contracts during the next month. Taken together, the short-term and long-term contracts will open the door to major international involvement in the OPEC member's oil sector for the first time in nearly four decades. The majors have been positioning themselves for years in the hope of eventually gaining access to Iraq's oil reserves. Its proven reserves, at 115 billion barrels, are the world's largest after Saudi Arabia and Iran, and Deputy Prime Minister Barham Salih said in April that as-yet unproven reserves could make the overall total as much as 350 billion barrels. "We feel it is very important for Iraq to arrest any decline and increase production," Shahristani said. The short-term service deals, each worth about $500 million, are aimed at quickly lifting output at Iraq's largest producing fields by a combined 500,000 barrels a day. Bush signs $162b war bill US President George W. Bush signed a $162 billion war spending plan that will pay for fighting in Iraq and Afghanistan until the next president takes office on Jan 20. The package approved by Congress includes a doubling of GI Bill college benefits for troops and veterans. It also provides a 13-week extension of unemployment benefits and $2.7 billion in emergency flood relief for the Midwest. The spending bill will bring to more than $650 billion the amount Congress has provided for the Iraq War since it started more than five years ago. For operations in Afghanistan, the total is nearly $200 billion, according to congressional officials. Agencies (China Daily 07/01/2008 page11) |
