Thread: NYTimes-Iraq Cancels Six No-Bid Oil Contracts

September 11, 2008
Iraq Cancels Six No-Bid Oil Contracts
By ANDREW E. KRAMER and CAMPBELL ROBERTSON
An Iraqi plan to award six no-bid contracts to Western oil companies, which came under sharp criticism from several United States senators this summer, has been withdrawn, participants in the negotiations said on Wednesday.

Iraq’s oil minister, Hussain al-Shahristani, told reporters at an OPEC summit meeting in Vienna on Tuesday that talks with Exxon Mobil, Chevron, Shell, Total, BP and several smaller companies for one-year deals, which were announced in June and subsequently delayed, had dragged on for so long that the companies could not now fulfill the work within that time frame. The companies confirmed on Wednesday that the deals had been canceled.

While not particularly lucrative by industry standards, the contracts were valued for providing a foothold in Iraq at a time when oil companies are being shut out of energy-rich countries around the world. The companies will still be eligible to compete in open bidding in Iraq.

The six no-bid deals were for work to increase Iraqi oil production from existing oil fields by half a million barrels a day — the same amount by which OPEC countries agreed Tuesday to reduce output. After its cancellation of the deals, Iraq reduced by 200,000 barrels per day its goal of producing 2.9 million barrels per day by the end of the year.

The deals would have been the first major oil contracts with the central government since the toppling of Saddam Hussein in 2003, though the Kurdistan region has separately signed more than 20 contracts.

Since that time, however, Iraq’s central government has moved on with other energy deals. The Oil Ministry last month signed its first major post-Hussein contract with the China National Petroleum Corporation. On Sunday, the Iraqi cabinet approved a deal with Shell to process natural gas in southern Iraq.

The ministry informed the oil companies of the cancellation on Sept. 3, according to a statement from Shell. In Vienna, Mr. Shahristani said the ministry would now invite bids on the contracts.

Shell said the Iraqi side had broken off negotiations. “Shell can confirm that we received a letter from Iraqi Ministry of Oil on September 3rd informing us of their decision to cease further discussions,â€

Kind of makes you wonder if the Iraqis want us in Iraq at all. They can take our money and usurp the lives of our young military, but any preference for anything in this country, or even helping to defer some of our costs of propping them up is out of the question. Ungrateful is as mildly as I can put it. And thanks, GWB and Dick Cheney, Rumsfeld, etc.

Everyone is pouncing on the penny at any and all cost.

I'm a major Star Trek fan and the reason behind the prime directive is clearly evident here with this "global kum-by-ah" attitude.....we aren't ready yet.

The test isn't getting it....it's what you do with it when you do....and well...not everyone has the "global" mind set. They are still throwing rocks and carrying clubs. And set on revenge or control.

crazybird wrote:

They are still throwing rocks and carrying clubs.

Sometimes I think of loading my purse full of rocks just in case, as I am so incensed that so many employees who are holding jobs I could and would do (but can't since I don't speak Spanish). Once at a checkout counter, I asked the checker what were those beautiful blooming trees in the parking lot. She didn't understand what a tree was. Finally the ladies ahead of me turned back and answered my question.

While not particularly lucrative by industry standards, the contracts were valued for providing a foothold in Iraq at a time when oil companies are being shut out of energy-rich countries around the world. The companies will still be eligible to compete in open bidding in Iraq





All the more reason to end our dependency on foreign oil, I would think.

We go there and free them and then they let China in the door...