Eurasia Press & News
Iraq currently produces only a fraction of its vast reserves, the third-largest in the world and among the cheapest to produce, and international oil firms have been positioning for years to gain access.
Big oil firms such as Royal Dutch Shell, Total, Repsol YPF, ConocoPhillips, BP, and Norway’s StatoilHydro are among firms that have said they have registered or intended to do so.
“We are going to carefully study and check the documentation. Next month we will declare the companies which are permitted to work in the Iraqi oilfields,” Oil Ministry spokesman Asim Jihad told Reuters.
Iraq produces about 2.3 million barrels of oil a day, dwarfed by its 115 billion barrels of proven crude oil reserves. Only those of Saudi Arabia and Iran are larger.
An oil official said last year Iraq’s oil sector could need as much as $75 billion in investment.
Iraq has not said what fields it will tender, or on what terms, but the service and extraction contracts on offer are seen as a stop-gap until a crucial oil law is passed, and will not provide the long-term involvement big oil companies crave.
POLITICAL WRANGLING
Violence and political wrangling over the oil law, which will decide how to share the country’s oil wealth among its different regions, has stifled foreign input in the oil sector.
Iraq’s cabinet agreed to a draft oil law a year ago but disputes with the Kurdistan regional government and objections from Shi’ite and Sunni Arab politicians have delayed it.
No end to the impasse is in sight, Iraqi officals and lawmakers say.
Some oil companies had already signed deals with the largely autonomous northern Kurdistan region, a move that has angered the government in Baghdad, which has threatened to blacklist them and declare the deals illegal.
BP has no plans to send personnel into Iraq until the security situation improves, but would be interested in service agreements and cooperation with Iraq, BP has said.
Violence has fallen 60 percent across Iraq since 30,000 additional U.S. troops became fully deployed in June, and Sunni tribal leaders turned against Sunni Islamist al Qaeda.
Attacks have also fallen on the back of Shi’ite cleric and militia leader Moqtada al-Sadr’s ceasefire, declared last year but due to expire this month. He has not decided whether to extend it, a Sadr spokesman said last week.
Meanwhile, Iraq’s oil infrastructure still is frequently targeted by insurgents, and rival groups in Iraq’s mainly Shi’ite south — Iraq’s oil exporting hub — are locked in a bloody battle for supremacy.
