10aces
08-22-2008, 18:47
Iraq Poised to Revive Oil Contract With China
By CAMPBELL ROBERTSON
Published: August 19, 2008
BAGHDAD — Iraq is on the verge of reviving an 11-year-old contract with China worth $1.2 billion, its largest oil deal since the invasion in 2003, an Oil Ministry official said Tuesday.
The deal sets new terms for an agreement reached between China and Iraq under Saddam Hussein in 1997. Unlike that agreement, which included production-sharing rights, the new one is a service contract, under which China would be paid for its work at the Ahdab oil field southeast of Baghdad but would not be a partner in the profits.
Hussein al-Shahristani, Iraq’s oil minister, is expected to complete the negotiations when he is in China late this week or early next week, said a ministry official who declined to be identified because he was not authorized to speak to the news media. Mr. Shahristani was in Poland with other ministry officials to study its oil industry, the official said.
In an interview that appeared Tuesday on al-Noor, an Iraqi news Web site, Mr. Shahristani said Iraq had decided that the original contract, with the China National Petroleum Corporation, was valid but open to negotiation.
“The Chinese contract was signed with the former regime,” he said. “It’s valid. It was unfair because it was a production-sharing contract. We have negotiated with them for a year. It was turned from a sharing contract into a service contract.”
Despite United Nations-imposed economic sanctions, Iraq had contracts with five foreign oil companies — from China, Russia, Indonesia, India and Vietnam — before the American-led invasion in 2003. Since then, Iraqi officials have been considering how those contracts should be honored.
“After long debate, we decided that those oil contracts should be reconsidered, not to be accepted just like that, because things have changed, the price of oil has changed, the regime is new,” said Thamir al-Ghadban, a former oil minister who advises Prime Minister Nuri Kamal al-Maliki.
“We arrived at this consensus, that those oil contracts should be reviewed,” he said.
Three companies had production-sharing contracts for oil fields in Iraq, though the Iraqi government maintains that Saddam Hussein had revoked a contract with the Russian oil giant Lukoil for one of the largest fields.
“Concerning the Russian contract, the former regime had signed it for political reasons and canceled it for political reasons, too,” Mr. Shahristani said in the interview on al-Noor. “This oil field will be put up for transparent public competition.”
The other contracts are being discussed, Mr. Ghadban said, but the agreement with China was the most pressing. Iraq wants the oil from the Ahdab field — expected to produce around 90,000 barrels a day — to supply a planned power station in the province that is expected to be one of the largest in Iraq.
Under service contracts, companies provide technical support and consulting on how to raise oil production. Six other service contracts — with ExxonMobil, Shell, Total, BP, Chevron and some smaller oil companies — were scheduled to be announced by the end of June, but have been stalled in negotiations. The duration of those contracts, which drew international criticism for being awarded without competitive bidding, has been shortened to one year from two, causing some of the interested companies to reconsider.
The contracts were not especially lucrative, but were looked upon as a way to open a relationship with one of the world’s largest oil-producing countries.
“Some of the companies have said one year is hardly worth the investment,” Charles Ries, the chief economic official in the American Embassy in Baghdad, told reporters on Sunday, citing a decision by the Anadarko Petroleum Corporation to abandon plans for a service contract.
“It appears that in present form, they probably won’t proceed on most of these or all,” Mr. Ries said of the Iraqi government, though he added, “Some of the companies are hoping to continue discussions.”
Suadad al-Salhy and Riyadh Mohammed contributed
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Looks like BIG OIL has stepped on their own *****. They and US officials have been trying to shove PSAs down the Iraqis throats, and now it has backfired. Now they are going sell the oil to the Commie/Capitalists.
And we are going to get stuck with the reconstruction/babysitting bill
Idiots!
I suspect the stalled negotiations with BIG OIL are because Bush wouldn't commit to a US troop pull out timeline
By CAMPBELL ROBERTSON
Published: August 19, 2008
BAGHDAD — Iraq is on the verge of reviving an 11-year-old contract with China worth $1.2 billion, its largest oil deal since the invasion in 2003, an Oil Ministry official said Tuesday.
The deal sets new terms for an agreement reached between China and Iraq under Saddam Hussein in 1997. Unlike that agreement, which included production-sharing rights, the new one is a service contract, under which China would be paid for its work at the Ahdab oil field southeast of Baghdad but would not be a partner in the profits.
Hussein al-Shahristani, Iraq’s oil minister, is expected to complete the negotiations when he is in China late this week or early next week, said a ministry official who declined to be identified because he was not authorized to speak to the news media. Mr. Shahristani was in Poland with other ministry officials to study its oil industry, the official said.
In an interview that appeared Tuesday on al-Noor, an Iraqi news Web site, Mr. Shahristani said Iraq had decided that the original contract, with the China National Petroleum Corporation, was valid but open to negotiation.
“The Chinese contract was signed with the former regime,” he said. “It’s valid. It was unfair because it was a production-sharing contract. We have negotiated with them for a year. It was turned from a sharing contract into a service contract.”
Despite United Nations-imposed economic sanctions, Iraq had contracts with five foreign oil companies — from China, Russia, Indonesia, India and Vietnam — before the American-led invasion in 2003. Since then, Iraqi officials have been considering how those contracts should be honored.
“After long debate, we decided that those oil contracts should be reconsidered, not to be accepted just like that, because things have changed, the price of oil has changed, the regime is new,” said Thamir al-Ghadban, a former oil minister who advises Prime Minister Nuri Kamal al-Maliki.
“We arrived at this consensus, that those oil contracts should be reviewed,” he said.
Three companies had production-sharing contracts for oil fields in Iraq, though the Iraqi government maintains that Saddam Hussein had revoked a contract with the Russian oil giant Lukoil for one of the largest fields.
“Concerning the Russian contract, the former regime had signed it for political reasons and canceled it for political reasons, too,” Mr. Shahristani said in the interview on al-Noor. “This oil field will be put up for transparent public competition.”
The other contracts are being discussed, Mr. Ghadban said, but the agreement with China was the most pressing. Iraq wants the oil from the Ahdab field — expected to produce around 90,000 barrels a day — to supply a planned power station in the province that is expected to be one of the largest in Iraq.
Under service contracts, companies provide technical support and consulting on how to raise oil production. Six other service contracts — with ExxonMobil, Shell, Total, BP, Chevron and some smaller oil companies — were scheduled to be announced by the end of June, but have been stalled in negotiations. The duration of those contracts, which drew international criticism for being awarded without competitive bidding, has been shortened to one year from two, causing some of the interested companies to reconsider.
The contracts were not especially lucrative, but were looked upon as a way to open a relationship with one of the world’s largest oil-producing countries.
“Some of the companies have said one year is hardly worth the investment,” Charles Ries, the chief economic official in the American Embassy in Baghdad, told reporters on Sunday, citing a decision by the Anadarko Petroleum Corporation to abandon plans for a service contract.
“It appears that in present form, they probably won’t proceed on most of these or all,” Mr. Ries said of the Iraqi government, though he added, “Some of the companies are hoping to continue discussions.”
Suadad al-Salhy and Riyadh Mohammed contributed
----------------------------------------------------------------------
Looks like BIG OIL has stepped on their own *****. They and US officials have been trying to shove PSAs down the Iraqis throats, and now it has backfired. Now they are going sell the oil to the Commie/Capitalists.
And we are going to get stuck with the reconstruction/babysitting bill
Idiots!
I suspect the stalled negotiations with BIG OIL are because Bush wouldn't commit to a US troop pull out timeline
