Say Anything Blog

I’m not enough of an expert on the oil markets to say what short-term impact this may have on prices at the pump, but long-term this is good news as Iraq has the second largest supply of oil in the world.

Baghdad, Jun 19, (VOI)- Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, the International Herald Tribune newspaper said on Thursday.

“Exxon Mobil, Shell, Total and BP - the original partners in the Iraq Petroleum Company - along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat,” the paper added.

“The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations,” it also said.

“The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production,” the newspaper explained.

Oil companies.  “No-bid contracts.” It’s enough to make Keith Olbermann wet his pants.

But even so, this is good news for both Iraq and America.  Like it or not, with American liberals still blocking any attempt to ramp up domestic production of oil and despite attempts to find viable alternatives to fossil fuels, our country is going to be dependent on foreign oil for the foreseeable future.  Having more oil available is a good thing.

As for Iraq, let’s not forget that a key to ending the war there successfully is for the Iraqi government to be capable of independence.  The influx of capital from the oil companies - both in terms of taxes and fees paid to the Iraqi government and wages/payments made to Iraqi workers and vendors - will go a long way toward making that happen.  Further, I’d be willing to wager, than any sort of US or international aid could.