Wednesday, July 2, 2008
Five years after the US-led coalition stormed into Iraq there is set to be another western invasion.
This time it is the world’s biggest oil companies leading the charge, 36 years after Saddam Hussein kicked them out.
The oil giants are seeking access to Iraq’s rich crude reserves, Australian companies BHP Billiton and Woodside are among them.
(Article continues below)
The Iraqi government wants to make up for the lost opportunities under Hussein’s rule and has the ambitious goal of doubling Iraqi oil production to more than 4 million barrels a day within five years.
Peter Zeihan, an energy analyst at geopolitical intelligence group Stratfor, says there is plenty of incentive for the big oil companies.
“They have the largest, easiest reservoirs to tap, they’re very close to existing export points, there’s infrastructure in place for over double the amount of oil that currently is being produced in Iraq,” Mr Zeihan said.
“When Iraq does ultimately open up in a big way and allow greenfield investments, every single oil major in the world wants to be part of that play. And if that means signing deals that you’re not exactly thrilled with today, so be it.”
The Iraqi government insists the companies that win contracts must take on a local partner who in turn must have a minimum 25 per cent stake in the deal.
In an attempt to fast track oil production the government will award six contracts on a no-bid basis, to a handful of mainly US companies.
This article was posted: Wednesday, July 2, 2008 at 4:50 am