The long wait to claim the prize draws to an end

The long wait may finally be over to claim the last great prize left for the oil industry.

But not, importantly, how the oil industry, or the Bush administration wanted it to.

Some 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power, four Western oil companies are in the final stages of negotiations this month on contracts that will return them to war-torn Iraq.

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.

The deals are expected to be announced by the end of the month and, in the words of the New York Times “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.”

As the Times puts it. “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.”

So it is unsurprising that to American, British and French go the spoils of war. In an interview with Newsweek last Autumn, the former chief executive of Exxon, Lee Raymond, said: “There is an enormous amount of oil in Iraq. We were part of the consortium, the four companies that were there when Saddam Hussein threw us out, and we basically had the whole country.”

And that’s what they want again.  However, these contracts are not what they wanted.  These are service agreements, that invite oil companies into Iraq, but do not guarantee any long term control over or return from these fields.  Very different than the original production sharing agreements that were originally proposed for Oraq.  Read more background on the struggle over the Iraqi oil law here.