Iraq to open oil up to foreign contractors

[rj1]

Re: Iraq to open oil up to foreign contractors

It would be a great start for everyone to agree what it was not about.

Ok. It was not about settling the various Antarctic land claims.

Oil companies the world over are being invited to freely bid on developing Iraqi oil resources, and their negotiations will be strictly between them, and the Iraqis. No "American Gangster" standing in there to "Collect the Vigorish" of CNOOC's drilling contracts with whatever Iraqi government ensues.

Well, the contract is not going to the Chinese I'd imagine regardless of the negotiations, unless in the next Iraqi election we get a government that absolutely hates us, which is the danger of democracy, and why in the past century our government and Britain's have looked the other way with autocrats as long as they toed the line we needed them to toe.

I will tell you what happened after my dad first got back from Iraq in mid-2003, which was when the initial war happened. He saw the price of gasoline and said in a sarcastic voice, "I went over and did all that for $1.37 a gallon?" That was back when $1.37 was high.

I don't believe this war was about oil. But I believe that it was realized to be a very good side benefit. Am I allowed to say that, that 2 + 2 = 4? And if the war planners didn't realize that the previously embargoed oil in Iraq could be thrown into the open market after overthrowing Saddam, then they're even more idiots than I originally realized.

[rj1]

Re: Iraq to open oil up to foreign contractors

If the US wants this to work they should separate the four ethnic regions and give them autonomy. Install a central government where only the four leaders are represented together with the US. Give each ethnic region it's own army because otherwise it won't work because Shii won't fire at Shii, Sounie not at Sounie etc. The army now being created will only fight itself. Then protect the central government militarily and get on with whatever your intention was.
regards

I'm skeptical on Iraqi federation. What's to say that after you separated Iraq into sections, the sections would want to stay together? There's no such thing as Iraqi patriotism for reasons due to religion, Saddam (who effectively was Iraq), and that over time their borders have changed so many times. Iraq was never really a state fought for by the locals, it was just land left over from a British mandate.

What's to stop the Sunnis if they have their own region to see they are outnumbered and they want to become a Saudi province? Same for the Shiites and Iran. Then you have the Kurds, some of which are Turkey's al-Qaeda and if a separate region would try to make it a de jure Kurdistan.

And do we really want to give more power and land in that case to Iran and Saudi Arabia?

[rj1]

Re: Iraq to open oil up to foreign contractors

I think we should look at the US foreign policy in the same way EJ suggests we look at Central Banks. If you want to know what they are up to, just read what they say. The US has a long history of saying they will support democracy and protecting economic interests and a long history of actions that support those words. Why is it so hard for everyone to believe that?

Because God gave me a brain, he expects me to use it, and part of that is to realize that most politicians are full of s***.

[Guest]

Re: Iraq to open oil up to foreign contractors

I seriously doubt, US will ever bail out of the Middle East, Iraq or no Iraq. If it does, I would recommend to be consistent and leave Europe too. In this case I want to give Europeans a good advice (similar to an old Soviet joke) about some planning for their future.

Optimists among them should learn Chinese, pessimists should learn Russian and realists should learn AK47.

I got a good chuckle from reading this. Medved's got the realism just right - a much needed dose of harsh reality, offered with a sincere, friendly smile. I'll vote for that.

[jtabeb]

Re: Iraq to open oil up to foreign contractors

One thing I learned during my military service in Lebanon is that you can't bring them into the fold. Think of it as living in two different realities ; christian vs muslim, western vs 16th century. Add the fact that these countries have never ever experienced a democracy (the whole concept is alien to them because they don't separate state and religion) and still have a thorough dislike towards christians stemming from the crusades (long memory indeed). You can't win them over and stay in the country at the same time. Your only hope can be installing a regime that will prove to be tough enough to withstand the ever continuing internal strife in these countries. Think of it as warring with your neighbours for the last 2000 years and suddenly an American (looks like someone from Mars to them) comes along and starts telling you to stop warring, to be friendly, and start talking.
Even if the US stayed there for another 25 years they couldn't get this task done. If the US wanted to knock out Syria and Iran they should have done so immediately after Sadam was captured. Staying put in Irak doesn't serve any purpose except drawing every young idiot from all neighbouring countries to take a potshot at you.
If the US wants this to work they should separate the four ethnic regions and give them autonomy. Install a central government where only the four leaders are represented together with the US. Give each ethnic region it's own army because otherwise it won't work because Shii won't fire at Shii, Sounie not at Sounie etc. The army now being created will only fight itself. Then protect the central government militarily and get on with whatever your intention was.
regards

R.E. If the US wants this to work

I'm actually not sure that they do want it to work, believe it or not. Not from what I learned the other day.

[rj1]

Re: Iraq to open oil up to foreign contractors

Take a ill-concieved plan and sell it to someone idealistic enough to believe it and not intellectually curious enough to think it through and you are going to have problems.

Bay of Pigs.

[BiscayneSunrise]

Re: Iraq to open oil up to foreign contractors

R.E. If the US wants this to work

I'm actually not sure that they do want it to work, believe it or not. Not from what I learned the other day.

What did you learn the other day?

[BiscayneSunrise]

Re: Iraq to open oil up to foreign contractors

GRG,

I have been thinking a little more about some of your thoughts regarding Iraqi oil production and security issues there and I am not certain your pessimism is fully warranted.

I agree that oil companies are reluctant to risk workers lives in Iraq but this seems to be a problem that oil companies have adapted to, Nigeria comes to mind. The risk to foreign workers aside, as you point out, Iraqi's are good operators and have shown themselves capable of bringing production back up to pre-war levels. And that has been under civil war conditions and with much of the infrastructure destroyed by violence. Given just a little more security and infrastructure spend, it seems as though they could do much better.

As for oil companies being reluctant to spend until their legal rights are confirmed, this also doesn't seem to be much different than the same risk of nationalization oil companies face in most of the emerging world.

If Iraqi's are resistant to foreign involvement, all the better. They are good operators in their own right, and with equipment provided by oil service companies they can increase production on their own thereby creating a robust oil industry run by the Iraqi's themselves.

Is this view overly optimistic?

[GRG55]

Re: Iraq to open oil up to foreign contractors

GRG,

I have been thinking a little more about some of your thoughts regarding Iraqi oil production and security issues there and I am not certain your pessimism is fully warranted.

I agree that oil companies are reluctant to risk workers lives in Iraq but this seems to be a problem that oil companies have adapted to, Nigeria comes to mind. The risk to foreign workers aside, as you point out, Iraqi's are good operators and have shown themselves capable of bringing production back up to pre-war levels. And that has been under civil war conditions and with much of the infrastructure destroyed by violence. Given just a little more security and infrastructure spend, it seems as though they could do much better.

As for oil companies being reluctant to spend until their legal rights are confirmed, this also doesn't seem to be much different than the same risk of nationalization oil companies face in most of the emerging world.

If Iraqi's are resistant to foreign involvement, all the better. They are good operators in their own right, and with equipment provided by oil service companies they can increase production on their own thereby creating a robust oil industry run by the Iraqi's themselves.

Is this view overly optimistic?

BiscayneSunrise: I would like to share your optimism (maybe that's your natural inclination as expressed in the Sunrise part of your nom-de-keyboard?), and much of what you say is correct.

My assessment comes from first hand meetings I have had over the past few years [in Jordan and Europe, not Baghdad!] with seniour personnel from the Iraq Ministry of Oil and some of the operational units such as South Oil Company, as well as discussions with Chevron and Shell personnel directly involved in their corporate Iraq efforts, and finally my own security advisors in the Arabian Gulf.

Just for the record, Iraq and Nigeria are absolutely no where near the same situation. I have been to Nigeria numerous times since my first trip there in November 2005. Most of the country is no more dangerous than any other third world location I have been to. We try to avoid Port Harcourt as much as possible as that is the location with greatest risk, but even PH is not comparable to anywhere in southern or middle Iraq. Outside the Kurdish controlled area in the North, Iraq is a complete no-go zone for foreign civilians, and I believe will remain so indefinitely. The security experts are clear when they say there is no way they can effectively provide a reasonable level of protection for civilian clients in those parts of Iraq.

My point is that the latest press releases about service agreements in Iraq are really just a formalization of what has already been going on, and most or all of the gains from those service activities have already been realized by the Iraqis working with the external technical support of the foreign oil majors. The oil majors may provide some badly needed additional funding in the near term as a show of good faith under these contracts, but they are not charities. With no legal or physical way to get paid back this funding will be minimal unless, and until, the oil companies see potential for signing Production Sharing Agreements or something similar. The current situation does not allow the Iraqis to share any of their export oil with companies making investments - hence foreign oil company investment limited to technical support, training, sponsoring Iraqi attendance at international conferences, etc, and zero actual cash investment directly in the country.

Perhaps the Iraqis will surprise me and get to that legal framework quickly...but I doubt it.

[zmas28]

Re: Iraq to open oil up to foreign contractors

Alas, I think some of the idealism in this thread might have been misplaced.
The recent New York Times article says that the awarding of contracts was not open-bid. Interesting also that Lukoil was not awarded a contract even though it had provided services gratis to the Iraqis.
http://www.itulip.com/forums/showthr...38706#poststop

[GRG55]

Re: Iraq to open oil up to foreign contractors

Alas, I think some of the idealism in this thread might have been misplaced.
The recent New York Times article says that the awarding of contracts was not open-bid. Interesting also that Lukoil was not awarded a contract even though it had provided services gratis to the Iraqis.
http://www.itulip.com/forums/showthr...38706#poststop

EVERYBODY has provided services gratis to the Iraqis...

[zmas28]

Re: Iraq to open oil up to foreign contractors

EVERYBODY has provided services gratis to the Iraqis...

Think of them as commissions.

[Slimprofits]

Re: Iraq to open oil up to foreign contractors

House approves $162 billion war-spending bill

But House Minority Leader John Boehner, R-Ohio, who helped broker the deal, insisted that the spending for the war and for veterans' benefits was worth it. "The cost of this bill, frankly, is high, but it's a price of freedom. And I don't think you put a price on freedom and security in our country," he said.

The price of "freedom" (i.e. a positive, generalized, simple idea substituted for whatever the Empire's goals happen to be) has been set at bankruptcy and fiscal insolvency.

[GRG55]

Re: Iraq to open oil up to foreign contractors

House approves $162 billion war-spending bill



The price of "freedom" (i.e. a positive, generalized, simple idea substituted for whatever the Empire's goals happen to be) has been set at bankruptcy and fiscal insolvency.

History rhymes...

Find the cost of freedom
Buried in the ground
Mother Earth will swallow you
Lay your body down

--Neil Young--