The problem when you have been waiting years for the main prize is that if you get offered second or third best, its never going to be good enough.
So when a host of international oil companies started discussions over short-term technical contracts in Iraq, they hoped that they would curry favour with the country for the greater prize that lay ahead: exploiting the country’s oil reserves.
Iraq wanted to sign six no-bid, short-term support contracts worth about $500 million each, but most if not all of these look like not progressing as both sides squabble over terms.
“It appears that on present form (the Iraqi government) probably won’t proceed with most of these or all of them”, Charles Ries, coordinator for Iraq’s economic transition at the U.S. embassy in Baghdad, has told reporters. (Notice its an America involved in the negotiations!).
Ries continued: “But I think that some of the companies are open to continued discussions even on relationship grounds, and some of the companies … don’t think it’s worth their time”.
Ries said the foreign firms were “lukewarm” about short-term contracts which “were never going to be hugely lucrative,” but they had been pursuing them in the hope of building a relationship with Iraq’s oil Ministry, and being seen in a good light for the larger development contracts.
Because even though the short-term contracts may not be signed, next up for discussion will be the much longer-term exploitation contracts, which will cause a feeding frenzy amongst the foreign companies. The prize is so big, you can expect huge back-room arm-twisting and secret deals… and don’t be surprised if the Americans and British come out on top.
Come on, you know who gets the spoils of war …
‘ …next up for discussion will be the much longer-term exploitation contracts, which will cause a feeding frenzy amongst the foreign companies.’
Explain to me once again why Iraq needs ‘exploitation’ contacts?
Exploration, maybe. Let Schlumberger do collect the data, turn it over, and go away. But there seems to be no need at all for foreign companies in Iraq.
Iraq and Saudi Arabia have the lowest lifting costs on earth. The Iraqis can finance the ‘exploitation’ of their oil fields themselves.
Of course the ‘Iraqis’ in charge of the oil ministry are the compradors put in place by the Americans, and they know who they are working for.
The Iraqis need the mulitnational oils like they need a hole in the head. They ought to go it alone, hiring the multinationals on an ad hoc, temporary basis, as needed.
UPDATE 2-Iraq to sign $1.2 bln oil service deal with China
It’s fee for service, not psa. The shape of the world to come after the failed US occupation of Iraq.
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