Analysis: Big Oil to sign Iraq deals soon

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Analysis: Big Oil to sign Iraq deals soon

Published: Dec. 6, 2007 at 2:00 PM
By BEN LANDO
UPI Energy Editor

WASHINGTON, Dec. 6 (UPI) -- Big Oil's big dreams are close to coming true as Iraq's Oil Ministry prepares deals for the country's largest oil fields with terms that aren't necessarily what companies were hoping for but considered a foot in the door of the world's most promising oil sector.

Iraq's proven oil reserves are only smaller than those in Saudi Arabia and Iran -- and the country is only about 30 percent explored.

Iraq produces about 2.4 million barrels per day, a recent increase from the 2 million bpd post-invasion average, but far below what its reserves could handle. Its oil sector is suffering from decades of Saddam Hussein-era mismanagement, U.N. sanctions and the effects of the current war.

The decision of how to develop a resource that provides for nearly the entire federal budget is political and controversial. To each side's alarm, the national government will rely on a Saddam-era law and Iraq's Kurdish region is signing deals on its own.

Details of negotiations between the ministry and international oil majors are being kept quiet, though media are picking up on pieces of deal-making.

MarketWatch reports executives from BP and Shell were to meet with Oil Minister Hussain al-Shahristani following Wednesday's meeting of the Organization of Petroleum Exporting Countries in Abu Dhabi. The global energy information firm Platts reports top ministry and company officials are to meet in Amman this week.

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http://www.upi.com/International_Security/Energy/Analysis/2007/12/06/analysis_big_oil_to_sign_iraq_deals_soon/3980/