And Iraq's big oil contracts go to ... Asian Countries.

Discussion in 'Politics, Religion, Social Issues' started by Stella, Apr 5, 2007.

  1. Stella macrumors 604

    Stella

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    #1
    http://money.cnn.com/2007/04/05/news/international/iraq_oil/index.htm

    I'm wondering what americans think of this.

    And Iraq's big oil contracts go to ...
    Companies from China, India and other Asian nations are seen getting the first contracts. But don't write off Big Oil just yet.
    By Steve Hargreaves, CNNMoney.com staff writer
    April 5 2007: 1:42 PM EDT

    NEW YORK (CNNMoney.com) -- Despite claims by some critics that the Bush administration invaded Iraq to take control of its oil, the first contracts with major oil firms from Iraq's new government are likely to go not to U.S. companies, but rather to companies from China, India, Vietnam, and Indonesia.

    While Iraqi lawmakers struggle to pass an agreement on exactly who will award the contracts and how the revenue will be shared, experts say a draft version that passed the cabinet earlier this year will likely uphold agreements previously signed by those countries under Saddam Hussein's government.

    Special Reportfull coverage

    And Iraq's big oil contracts go to ...
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    "The Chinese could announce something within the next few months" if all goes well with the oil law, said James Placke, a senior associate at Cambridge Energy Research Associates who specializes in the Middle East.

    Behind high oil and gas prices
    The Asian firms are at an advantage for several reasons.

    First, less constrained by Western sanctions during the Hussein regime, they've been operating in Iraq and know the country's oilfields, said Falah Aljibury, an energy analyst who has advised several Iraqi oil ministers as well as other OPEC nations.

    Aljibury said the first contracts likely awarded will be to the Chinese in the south central part of Iraq, the Vietnamese in the south, the Indians along the Kuwaiti border, and the Indonesians in the western desert.

    The contracts under consideration are small.

    Aljibury said the Chinese agreement is to produce about 70,000 barrels of oil a day, while the Vietnamese one is for about 60,000.

    It's hard to put a dollar amount on what those contracts might be worth, as security costs, drilling conditions and the exact terms to be offered by Baghdad are unknown, said Christopher Ruppel, a senior geopolitical analyst with the consulting firm John S. Herold.

    But the barrel amount is tiny even by Iraq's depressed post-war production of around 2 million barrels a day.

    And the country is thought to be able to ramp up production to over 3 million barrels a day with fairly little effort, providing the security situation improves. Rosy estimates even have Iraq producing 6 million barrels a day in the long term, which would make it the world's No. 4 producer behind Russia, Saudi Arabia and the United States.

    But the Asian firms are also well positioned to grab further contracts.

    Having avoided military entanglements in the region, they may curry more favor with the Iraqi people.

    "They have no involvement with the secular or ethnic people," said Aljibury. "The conditions favor them."

    Given its rapidly growing thirst for oil, combined with its feeling of isolation from world oil markets, China is sometimes viewed as more cavalier than Western oil firms when it comes to putting capital and people at risk. That could lead them to sign contracts in violent Iraq sooner than Western firms.

    "The Chinese seem to be willing to go places where other companies can't find workers to go," said Adam Sieminski, chief energy economist at Deutsche Bank.

    But none of this suggests Western firms like ExxonMobil (Charts), Chevron (Charts), BP (Charts) and Royal Dutch Shell (Charts) will be completely cut out of the action.

    First, their technical prowess is world renowned.

    "I have not heard anything from any Iraqi ministers against U.S. oil companies," said Aljibury. "In fact, I have heard the opposite. They are the best in field exploration and development. They want them."

    Second, Iraq's oil contract game has just begun.

    According to a letter supplied by John S. Herold's Ruppel, memorandums of understanding have been signed with all the oil majors for several years. And Iraqi Oil Minister Hussein al-Shahristani has said the country plans to tender for major oil projects in the second half of 2007.

    Steve Kretzmann, executive director of Oil Change International, an industry watchdog group, criticized the draft oil law for allowing long-term oil contracts to be awarded to foreign oil firms, a practice he said was unique in the Middle East.

    "Giving out a few crumbs to the Chinese and Indians is one thing," said Kretzmann, who noted the draft law was seen by both the Bush administration and the International Monetary Fund before it was given to Iraq's parliament. "But the real prize are the contracts that award long-term rights. I think the [Western oil companies] are biding their time."
     
  2. miloblithe macrumors 68020

    miloblithe

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    #2
    I'd say the jury is still out. The real contracts are yet to come. And I'd bet anything that U.S. and British companies won't be left out.
     
  3. princealfie macrumors 68030

    princealfie

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    #3
    But you never know, do you?
     
  4. Desertrat macrumors newbie

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    #4
    Asian countries are negotiating for any and all oil they can get. After all, Japan imports 100% of her oil, and China now imports more than Japan.

    About two years back, China signed a big-deal contract with Iran, and has been negotiating with Venezuela. A problem there is that both countries' fields are declining in production. Both, from around 3.3 mmbpd down to 2.8 mmbpd.

    From the FWIW files: Some 30 years back, Japan's imports meant a tanker every eight miles, from the Straits of Hormuz to Japan. A "pipeline of gulps". Lord knows what the numbers are, now.

    Ah, well. If the silly twits would get over the killing spree, 2mmbpd at $60 per each would build a lot of infrastructure. Schools, hospitals, highways, water supply, sewer plants...

    'Rat
     
  5. miloblithe macrumors 68020

    miloblithe

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    #5
    Which silly twits would those be?
     
  6. pseudobrit macrumors 68040

    pseudobrit

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  7. Desertrat macrumors newbie

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    #7
    LOL LIke I said here a couple of years ago, if folks quite shooting at our guys, and laid off the IEDs, we'd leave in a heartbeat. And after we're gone and it all looks "normalized", they could go back after each other, if that's still what they want to do.

    'Rat
     
  8. Swarmlord macrumors 6502a

    Swarmlord

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    #8
    That area hasn't had someone that bright leading them since Saladin. Could you imagine what Europe and Asia would be like if those cultures had the same mindset?
     
  9. miloblithe macrumors 68020

    miloblithe

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    #9
    LOL, leave in a heartbeat? Have you noticed the embassy the US built in Iraq? Nothing says we're itching to leave like a $600 million dollar embassy covering 80 football fields and housing 1000 Americans, the largest US embassy in the world.

    http://en.wikipedia.org/wiki/US_Embassy_in_Iraq

    http://www.usatoday.com/news/world/iraq/2006-04-19-us-embassy_x.htm
     
  10. pseudobrit macrumors 68040

    pseudobrit

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    #10
    I don't know. Would Europe look like this?

    Air War Dresden Clean Up.jpg

    Would Asia look like this?

    tokyo1945www.jpg
     
  11. princealfie macrumors 68030

    princealfie

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  12. Ugg macrumors 68000

    Ugg

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    It's not a matter of intellignence, surely even you can admit that. SH was a paragon of American virtue. Humble beginnings, worked hard and rose to the top. What went wrong were the Brits and Americans greedy for Iraq's oil who led him astray.

    Can you imagine where Texas would be if it weren't for the US?
     
  13. zimv20 macrumors 601

    zimv20

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    #13
    in mexico?
     
  14. Desertrat macrumors newbie

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    #14
    Well, it was folks who came from the US and Mexico* who won at San Jacinto, but it wasn't "the US" who did the deal. They thought of themselves as Texians.

    Antonio Lopez de Santa Anna was a disliked despot in Mexico as well as in Texas. Lotsa folks figured he was descended from a long line of bachelors.

    'Rat

    * And Germany and Alsace and a few other places.
     

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