Iraq takes bid on oil field fevelopment
Iraq is poised to open its coveted oil fields to foreign companies this week for the first time in nearly four decades, a politically risky move in a country eager to shake off the stigma of occupation.This is happening at a time when Democrats are still strangling domestic production of energy and investing in a huge magic energy program that includes huge tax increases on US citizens. The contrast is striking and the Democrat "energy" bill will make us more dependent on outside sources like Iraq while saying they are doing the opposite.
Iraqi politicians and some veteran oil officials have said the deals are unduly beneficial to oil giants, which are viewed warily by many in this deeply nationalistic but cash-strapped country.
Oil executives have been following the matter with apprehension, industry analysts said, but they are eager to get a foothold in Iraq, which has the world's second-largest proven crude reserves and is seen as the only major penetrable market.
"It's something the industry really wants," said Ben Lando, editor of Iraq Oil Report, an Iraq energy news Web site. "The number of reserves around the world that they have access to is declining. And Iraq has so much oil."
Iraq's Oil Ministry is expected to auction eight contracts for six active oil fields and two largely undeveloped gas fields Monday and Tuesday. Thirty-five companies have been selected to submit bids for the 20-year service contracts.
The winners will be required to give the Iraqi government a total of $3 billion in loans. They will be compensated for costs and will earn a per-barrel fee for boosting production at the fields, ravaged by years of war and sanctions.
Although the terms for investors are less than ideal, analysts said, those who get picked in the first round are likely to receive more lucrative contracts in the future. The companies are also preparing bids for a second round of contracts for work at undeveloped fields, which Iraqi officials expect to award in coming months.