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35 foreign firms win deals to develop Iraq’s oil riches

Ahmad Kadhem, Azzaman

June 23, 2008

The Ministry of Oil has given 35 foreign oil firms the permission "to extract and develop" oil fields in Iraq, the ministry’s spokesman said.

Isam Jihad said more than 120 applications were made in response to offers the ministry had announced by the end of 2007.

"The selection of these companies was made in the light of expertise, their financial situation, environment-related issues and equipment," the spokesman added.

However, Jihad did not make clear whether there was any competitive bidding by the companies winning the deals particularly the five major Western firms said to have already signed their contracts.

Many Iraqis are skeptical about Exxon Mobil, Shell, Total and BP – original partners in the nationalized Iraq Petroleum Company or the IPC – as well as the U.S. Chevron. These firms, the ministry says, are to help Iraq add 500,000 more barrels a day to its nearly 2.5 million barrels currently.

The deals with these companies have already fanned mistrust and resentment among Iraqis who have always looked at their oil riches within a nationalist framework.

Jihad did not say whether the choice was competitive in nature and declined reassuring that any other deals would follow normal business practices, raising fears of backdoor deals.

The announcement comes as Iraqi legislators are still quarrelling over a draft oil and gas law. Iraq’s competing religious and ethnic groups thought no deals would be made before the passage of the law through parliament.

It is not clear which oil fields will be developed by these firms but Jihad said the ministry intends to announce the details in a press conference by the end of June.

"These deals are not investment deals. They are contracts for the development of existing and producing fields with the aim of increasing output," Jihad said.

Substantial increases in output can only be made when new and currently non-producing fields are developed.

Iraqi Kurds, with a semi-independent enclave in the north, have taken matters into their own hands and singed deals with foreign companies to develop new fields in their areas despite outcries from the central government in Baghdad.


:: Article nr. 45117 sent on 24-jun-2008 05:03 ECT

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Link: www.azzaman.com/english/index.asp?fname=news\2008-06-23\kurd.htm



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