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Western Oil Companies Back in Iraq With Unusual Contracts

Thirty-six years after Saddam Hussein nationalized oil and kicked out Western companies, Iraq's Oil Ministry has awarded Exxon Mobil, Shell, Total, and BP contracts set to bring the oil giants back.

Despite the fact that high oil prices put these contracts in high demand, Iraq granted very unusual no-bid contracts, meaning the companies did not have to compete with their counterparts in China, Russia, and India. Today's New York Times explains:

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.

The oil companies assure that they intend to help Iraq rebuild its neglected oil infrastructure. To see how,

.

Private companies will bring new technology and expertise to Iraq, as well as new oil revenue to help rebuild other infrastructure. Interestingly, the contracts, designated as "service contracts" to be paid with oil, circumvented any legislative approval.

For a more in-depth explanation on this unusual, yet seemingly predictable development, check out the whole NY Times story. Would it have been better if Western oil companies came back to Iraq under less exceptional circumstances?

Source

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Bebeshopper Bebeshopper 7 years
It's scary how predictable all of this was. I'm starting to think controlling oil was the only reason George Bush ever got into politics. After all, he and Cheney will now need a fat retirement portfolio. Seems like Bin Laden did him a favor on 9/11. Gave him a vehicle for his agenda. I wonder if the oil market has been manipulated these past months so that everyone will be desperate enough to be happy when we start taking Iraq's oil instead of saying, "Ahhh . . . now I get it".
yesteryear yesteryear 7 years
with all the other sinister goings-on in iraq, with just about everyone knowing this to be the truth, with mccain himself admitting that we are there for oil (“My friends, I will have an energy policy which will eliminate our dependence on oil from Middle East that will then prevent us from having ever to send our young men and women into conflict again in the Middle East.”). AHEM.
mymellowman mymellowman 7 years
If only the rest of the world could be as classy as you Steph. :)
stephley stephley 7 years
Doesn't having sand in your mouth all the time bother you?
mymellowman mymellowman 7 years
Well thanks for clearing that up yesteryear. :) Rac, I admit we will never agree on this topic. You are convinced there is a Conspiracy between the President and The United States to go into Iraq just for oil and will grasp at any oil company being in Iraq (doesn't even matter of they are American companies) as being proof that this is the reason we went in there. There really is nothing further for us to discuss on this at the moment. I listed above my reasons for this not being concrete evidence that oil is the reason for going into Iraq. Your response wasn't really a further discussion on how this proves how we went in solely for oil, how the oil companies (of which many are not even US Companies) have taken the revenues of the Iraqi's Oil (even though they are being paid for a service and not entitled to ownership or percentages of the oil pumped,) or items further on this discussion. Instead, your response was more that I didn't buy into the straws that your grasping at to "prove" your conspiracy. Furthermore, as these contracts have not even been awarded and we do not know the final terms (except that they are only for a year or two (as they are a stop-gap measure,) that the real contracts will go through a bidding system after that, that these companies are not all American Companies or that the oil companies nor the US Government have no ownership in any of the oil (I admit, very minor details) that we should see what these contracts actually entail.
yesteryear yesteryear 7 years
raciccarone, mymellowman is clearly insinuating that you are somehow affiliated with the big oil companies and that your "dealings" with them have allowed you to time travel and somehow manage to post a comment to a story a whopping 4 minutes earlier than everyone else. DUH! WAKE UP!
stephley stephley 7 years
I've seen references to 50 and to bases already in Iraq, but haven't seen anything that details locations. I'm sure some have to be near oil operations - you can't have a war on terrorism and leave such an important possible targeted unguarded. And there's no point in fighting a war for oil if you aren't going to guard it.
Meike Meike 7 years
As expected. Greedy capitalists everywhere in the U.S. regardless if you're red or blue. **votes green although it's a pointless effort**
liliblu liliblu 7 years
I have a question about the permanent bases that are to built in Iraq. Where will the bases be located? How many will be close to the oil operations?
raciccarone raciccarone 7 years
What do you need to see? Actual receipts? You want to watch video of of two people one with a bag full of money with a big money symbol on it handing it off to Bush? I wish you conservatives were this discerning about every single story about Gore or Obama that flushed down the media toilet. And as for being the first to comment on here, you lost me on that one. Was that supposed to mean something?
stephley stephley 7 years
It's possible some members saw potential benefit for themselves - oil companies donate to many of them and there are always post-Congressional careers to consider. But as a Senate investigation, the Pentagon Joint Forces Command Report and numerous others, have all cited Administration lies to win support for the war, it's also possible that some members of Congress were duped. It doesn't follow that everyone had to be on board for one reason.
mymellowman mymellowman 7 years
"The only people who will benefit from the war on Iraq are wealthy oil men who finance Bush's election campaigns, and people who have huge personal investments in the oil industry." - Bush didn't go into this war alone, Congress went right with him. That means almost all of Congress, on both the right and left, were working for the oil companies?
stephley stephley 7 years
“Of course it’s about oil, we can’t really deny that,” General John Abizaid said of the Iraq campaign. Abizaid succeeded General Tommy Franks as Commander, USCENTCOM, on July 7, 2003, and was also elevated to the rank of 4-star general the same week. If Bush is in Iraq for the oil, it doesn't necessarily follow that the point is to control the market price. Screw the average American. The point is to have oil to control and to sell. The only people who will benefit from the war on Iraq are wealthy oil men who finance Bush's election campaigns, and people who have huge personal investments in the oil industry. Don't think small.
janneth janneth 7 years
Q There are reports that we've divided up the oil already, divvied it up with the Russians and French and so forth. Isn't that true?.... MR. FLEISCHER: No, there's no truth to that, that we would divide up the oil fields. this is from a press briefing in 03. I guess now we are afraid of Russia, so we substituted our pals in the UK. http://ingush.berkeley.edu/~pdscott/iraq.html
UnDave35 UnDave35 7 years
Thanks for bringing up the good points MM.
mymellowman mymellowman 7 years
Oh, and for who never got a chance to read where this all stemmed from, here is my original post: "I know people bring up Iraq and their oil quite often as the reason for going in, but I was wondering how this is thought to be the reason? I will say I am no expert on oil, but my understanding is as follows (which would also show that taking control of Iraq would have no effect on really lowering or controlling the oil): 1. Iraq is a member of OPEC, though it has not hard output requirements since around 1998 I believe. Even if it does not have any output requirements, it is still a member of OPEC which would mean that any oil it is exporting is going to be sold via OPEC, correct? So, as long as they are a member of OPEC it wouldn't really matter who was/is running the country as to price of oil and cost to the US because the price would still be affected by OPEC, not by the governing regime. 2. OPEC aside, the oil being sold would still be sold at market prices. In January of 2007, OPEC nations produced 30,451 Barrels of oil. Of that, 1,481 barrels were pumped by Iraq. That means that less than 5% of the oil produced was from Iraq. Even if Iraq flooded the market with the 1,500 barrels at half the market rate, it would have very little effect on the cost of oil within the US as they only make-up a small percentage of the oil produced. So, back to what I was asking previously, how do people see that we were/are in Iraq over the oil when I don't understand how we would/could control it or even have a strong effect on the market price?"
cine_lover cine_lover 7 years
You go 3M! :highfive:
mymellowman mymellowman 7 years
Hey Rac, I wonder how you were the first one to get a post in here. ;) I have to head to work, so, sadly, I will not be able to give you the attention you are probably wanting right now, but I will try and make a few brief points. First and foremost I think it is very important to note that not all of these companies listed are US Companies. Shell and BP are British Companies and Total is French. So it would seem the US is going to war for foreign companies too. Next, let's take note that these are one to two years contracts. This is important to note because these are incredibly short contracts that are being used to lure in top of the line equipment and procedures into the field. As noted in the report, these are stop-gap contracts being thrown together. If these were long term contracts, I would feel a bit different, but these are one to two year contracts that are pretty much being used to set-up a solid infrastructure quickly. After these contracts end they are supposed to go into bidding for the real contracts of the future. But, this is all a bit different than our original disagreement Rac. You said that the Iraqi's oil revenues would be set to go to American Companies, but this article does not prove this. This article states that the companies will not be leasing or getting ownership of the oil with these contracts, but will be paid for their services of setting up the infrastructure and pumping the oil. The revenues of the oil is still going to the Iraqi government. That means that it is still Iraq's oil, not the US, or companies from the US, UK or France. Now if you want to say it's messed up that these companies are being paid for their services, you can make that argument but I do believe it will fall on deaf ears. Even with these short term contracts being awarded, I still find it hard to say that we went into Iraq so that oil companies (many of whom aren't even US Companies) could get two year contracts. Additionally, this does mean that I will not be sending any apologies along, but do feel free to wait by the mailbox. :)
janneth janneth 7 years
"AMERICA’s elder statesman of finance, Alan Greenspan, has shaken the White House by declaring that the prime motive for the war in Iraq was oil." http://www.timesonline.co.uk/tol/news/world/article2461214.ece But Bush says it was about terrorism. Golly gee, I don't know who is telling the truth!!!
popgoestheworld popgoestheworld 7 years
I read in the aritcle that Lukoil (Russia) also helped consult but they were denied a no-bid contract so I guess the "thank yous" are fairly limited. Also, question for you Liberty. The NY Times article said they are currently in negotiations for the contracts, but this article states they've been awarded. Is that true or just an assumption that they will be awarded because they're in the final negotiations? Not trying to challenge you, I'm just curious. Honestly, this just smells bad, no way around it. It will be interesting to see how the contracts are structured in terms of who gets profits from this. These contracts are also very short (1-2 years) and have been touted as a way to get them back on track quickly. Hopefully, they'll diversify after that. Also, not sure if it matters but hte 4 companies awarded contracts are companies that were there before it nationalized. I wonder if that had anything to do with the choice to reinstate them before the others.
popgoestheworld popgoestheworld 7 years
I read in the aritcle that Lukoil (Russia) also helped consult but they were denied a no-bid contract so I guess the "thank yous" are fairly limited.Also, question for you Liberty. The NY Times article said they are currently in negotiations for the contracts, but this article states they've been awarded. Is that true or just an assumption that they will be awarded because they're in the final negotiations? Not trying to challenge you, I'm just curious.Honestly, this just smells bad, no way around it. It will be interesting to see how the contracts are structured in terms of who gets profits from this. These contracts are also very short (1-2 years) and have been touted as a way to get them back on track quickly. Hopefully, they'll diversify after that.Also, not sure if it matters but hte 4 companies awarded contracts are companies that were there before it nationalized. I wonder if that had anything to do with the choice to reinstate them before the others.
jenintx jenintx 7 years
...additionally, where would that big "thank you" to the countries that helped the U.S. rid the Iraq of Saddam Hussein be? Why is it that only the U.S. is getting this "thank you"?and I'm not trying to be snarky with my response. i would like to believe the best about our government, but it's become increasingly hard to do so.
jenintx jenintx 7 years
...additionally, where would that big "thank you" to the countries that helped the U.S. rid the Iraq of Saddam Hussein be? Why is it that only the U.S. is getting this "thank you"? and I'm not trying to be snarky with my response. i would like to believe the best about our government, but it's become increasingly hard to do so.
LibertySugar LibertySugar 7 years
I think it's pretty apparent that the interests of everyday Americans are not directly correlated to those of oil companies. For example, as gas prices rise and American consumers suffer at the pump, oil companies post record profits.
jenintx jenintx 7 years
i would think that a big "thank you" like a no bid contract would be exactly what the government was hoping for when we entered Iraq in the first place. it wasn't guaranteed, but it was probably "hoped for." not that i think the world isn't better off without saddam hussein, but i do think it will look awfully "convenient" to an already-U.S.-critical world.
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