The capitalists see it as a good thing, naturally.
Iraq: Baghdad may yet fulfill its potential
By Carola Hoyos
Published: May 26 2009 05:25
After almost 40 years of exile, international oil companies are about to return to Iraq.
For companies such as BP, Shell, Total and ExxonMobil, Iraq represents the biggest opportunity in decades.
Not since the fall of the Soviet Union led to the revival of Russia’s industry and significant discoveries in central Asia, has such a promising oil frontier emerged.
The companies are among those expected to bid next month for oil service contracts. They hope their work in helping revive Iraq’s tired old fields will lead to being allowed to tap its vast undeveloped reserves.
Iraq has reserves of 115bn barrels, but war, sanctions and underinvestment have meant the country is able to produce only about 2.4m barrels a day, a fraction of its potential.
But the fall in oil prices – to about $60 a barrel, from $147 last July – has left a gaping hole in Iraq’s budget. As a result, politicians in Baghdad have finally become serious about writing contracts that oil companies are willing to accept, even without a hydrocarbons law.