The Bonanza Begins
So it appears the Iraqi Oil Ministry waited until the final months of the Bush administration to open the store for Western petrogiants. Call it a parting present. Now that we know the U.S. "advised" the ministry on giving no-bid contracts to Exxon, Shell, Total and BP, the Washington Post gives an overview of what Minister Hussain Shahristani — a former exile who’s sympathetic to both the U.S. and Iran — plans to give Big Oil:
Shahristani said 35 companies — including firms from the United States, Britain, France, Russia, China and India — had been selected to bid on long-term contracts to provide services, equipment, training and advice on the country’s biggest oil fields, which have suffered from age, technological neglect and mismanagement during years of war and economic sanctions.
"The six oil fields that have been announced today are the backbone of Iraq’s oil production, and some of them are getting old and production is declining," Shahristani told reporters.
Shahristani’s move crystallizes a dynamic intensifying in 2008: a trend toward greater clientism by the weak government to bolster itself against growing pan-sectarian nationalism. Each reinforces the other. This is how the Post records the reaction to the new oil bonanza by both Sunnis and Sadrists:
Followers of Shiite cleric Moqtada al-Sadr, who opposes Western firms having any control over Iraq’s oil, voiced suspicion. "Those agreements should be open and transparent," said Liwaa Smaism, a senior Sadrist lawmaker. "We do not know whether those contracts are ordinary technical contracts with foreign companies, or are they involved in the excavation and production of the oil?"
Other lawmakers said any deals should be made after parliament approves legislation governing Iraq’s oil resources. "I do not believe that the companies should sign contracts in such a fragile political situation and confusing security situation," said Mohammed al-Daini, a Sunni lawmaker.
Daini added that "America has come over here to Iraq in order to first control the oil wealth and, second, the entire economical wealth." He said he and other lawmakers should review the contracts to ensure they don’t allow Western firms to infringe on Iraq’s sovereignty.
According to Antonia Juhasz, author of the forthcoming book "The Tyranny of Oil," the short-term nature of the contracts were designed to avoid sending them to the parliament, where they’d face probable rejection.