Baghdad, July 01: Iraq is locked in a struggle with the world’s largest oil companies over contracts that would see “Big Oil” return to the Iraqi oilfields for the first time in almost 40 years.
The award of contracts began in Baghdad yesterday and was broadcast live on television to show there were no secret corrupt deals.
But the process was immediately in trouble as some of the 32 international oil companies involved baulked at the low level of fees they would be paid by Iraq.
The government had hoped they would take risks to become involved once again in Iraq’s oilfields, where reserves at an estimated 115 billion barrels of crude are estimated to be the third largest in the world. Iraq wants to raise its faltering oil production, income from which is desperately needed to reconstruct the country after decades of war.
At stake yesterday were six producing oilfields and two undeveloped gas fields, the most important of which is the massive south Rumaila oilfield just north of the Kuwaiti border. The contract finally went to a consortium led by BP and included the China National Petroleum Company, but only after its initial bid, as well as that of a rival consortium led by Exxon Mobil, had been rejected by the Iraqi Oil Ministry as too low. Other fields attracted less interest.
–Agencies