Despite previous confirmation that it would award exceptional no-bid contracts to Western oil giants, Iraq just announced that it has failed to sign the deals. Meanwhile, American officials have confirmed that the Bush Administration was directly involved in the creation of the contracts, as American advisers led by a State Department team directly advised Iraqi officials. But today, Iraq announced that it failed to finalize the deals as expected, because the oil companies "refused to offer consultancy based fees as they wanted a share of the oil."
American government lawyers and private sector consultants provided the Iraqi Oil Ministry sample contracts, and offered detailed suggestions during the drafting process. Sources told the New York Times that assistance was simply technical and legal, and that the team did not help choose which companies received the lucrative deals. Still, the close involvement raises questions of an inherent conflict of interest and about America's commitment to Iraqi sovereignty. Although Iraq says it continues to negotiate with Western oil giants, they "think there is no need to share Iraq's oil with anybody."
Even if the US only provided technical direction, does a perception of inappropriate intrusion threaten America's credibility in the region? Does this inflame suspicions that the US went to war for oil?