Iraq “Abandons” Contracts

The problem when you have been waiting years for the main prize is that if you get offered second or third best, its never going to be good enough.

So when a host of international oil companies started discussions over short-term technical contracts in Iraq, they hoped that they would curry favour with the country for the greater prize that lay ahead: exploiting the country’s oil reserves.
Iraq wanted to sign six no-bid, short-term support contracts worth about $500 million each, but most if not all of these look like not progressing as both sides squabble over terms.
“It appears that on present form (the Iraqi government) probably won’t proceed with most of these or all of them”, Charles Ries, coordinator for Iraq’s economic transition at the U.S. embassy in Baghdad, has told reporters. (Notice its an America involved in the negotiations!).
Ries continued: “But I think that some of the companies are open to continued discussions even on relationship grounds, and some of the companies … don’t think it’s worth their time”.
Ries said the foreign firms were “lukewarm” about short-term contracts which “were never going to be hugely lucrative,” but they had been pursuing them in the hope of building a relationship with Iraq’s oil Ministry, and being seen in a good light for the larger development contracts.
Because even though the short-term contracts may not be signed, next up for discussion will be the much longer-term exploitation contracts, which will cause a feeding frenzy amongst the foreign companies. The prize is so big, you can expect huge back-room arm-twisting and secret deals… and don’t be surprised if the Americans and British come out on top.
Come on, you know who gets the spoils of war …