The saga of Iraq's oil has made the press again, with international oil majors making major inroads into their goal of tapping Iraq's oil fields. The ABC reports on the auctioning off of production rights for some of the country's largest fields - Untapped oil fields auctioned in Iraq.
Iraq has completed its second international oil auction, awarding seven foreign firms the right to exploit some of the country's largest untapped oil fields. One of the biggest contracts was won by a consortium of Russia's Lukoil and and Norway's Statoil. Another went to Royal Dutch Shell and Malaysia's Petronas. ...
The Iraqi oil minister says the successful deals will boost the country's oil production by almost five million barrels a day, almost double the current production rate.
The BBC is headlining a greatly increased Iraqi oil production capacity -Iraq oil capacity 'to reach 12m barrels per day'.
Iraq's oil capacity could reach 12 million barrels per day (bpd) in six years, the country's oil minister says.
Hussein al-Shahristani told reporters in Baghdad that oil producers would not necessarily operate at full capacity, but would take into account demand. Saudi Arabia, the world's largest oil exporter, has a capacity of 12.5m bpd.
Earlier, a joint bid by Russian and Norwegian oil firms won the contract for the "supergiant" West Qurna field, said to have reserves of 13bn barrels.
Lukoil and Statoil will get $1.15 a barrel and will work to raise output from West Qurna Phase 2, in the Basra region, to 1.8m bpd. In June, a winning bid to develop another Iraqi field received $2 a barrel.
On Friday, the contract to develop the 12.6bn-barrel Majnoon field in southern Iraq was won by a consortium led by Shell. It also pledged to increase daily production to 1.8m barrels, up from only 46,000.
Rights for the eastern Halfaya field, with 4.1bn barrels of reserves, went to a consortium led by the Chinese state oil company, CNPC.
Patrick Cockburn at The Independent reports that the Iraqi government is claiming that it isn't giving up control of the fields - Rush for Iraq's oil in defiance of bombers.
The profits for the oil companies will be limited under contracts now being agreed, but they have evidently decided to accept this to secure an entry ticket to a potential Iraqi oil bonanza.
"The second round of bidding represents a new era in the history of the Iraqi oil industry," said the Prime Minister Nouri al-Maliki as he opened the auction. For once such hyperbole may be true because it will see foreign oil companies returning to Iraq en masse for the first time since oil was nationalised in 1972.
Iraqis are intensely suspicious that President Bush's invasion of Iraq in 2003 was motivated by a plan to get hold of Iraqi oil. The government is intent on showing that it is not giving away control of Iraqi oil, the country's only asset. "The old way was in darkened rooms, behind closed doors," said Mr Maliki. "But today what is happening is clear to everyone."
The success of the oil auction is crucial to the future of Mr Maliki because present oil revenues, at around $60bn a year are only just enough to pay salaries and government expenses. There is little left for development and reconstruction of the economy, ruined by continuing conflict and sanctions since the start of the Iran-Iraq war in 1980. Critics argue that Iraq's own oil industry could have raised ouput by itself, but it is crippled by lack of money, organisation, equipment and personnel.
The Oil Ministry's strategy seems to have paid off. In the first auction in June only BP and China's CNPC were willing to accept a fee of $2 for each barrel of extra crude above a minimum production target produced in the super giant Rumaila, one of the largest oilfields in the world. But in recent weeks other big companies have followed suit. Mr Shahristani said: "They will not have a share of Iraqi oil, and our country will have total control over production."
The Guardian had an article before the auction wondering what it means for Iraq - Will oil empower or emasculate Iraq?.
The timing could not have been worse. On Tuesday afternoon, set against the sleek backdrop of a London hotel, the vice-chairman of Iraq's oil and gas committee, Abdul-Hadi al-Hassani, told the BBC that the time is right to invest in Iraq as the government has "gone from strength to strength".
A short distance across town, Sir John Scarlett, head of MI6 and gatekeeper to some of the precious "intelligence" that triggered the war, refused to confirm or deny the report that an Iraqi taxi driver was responsible for the "45 minutes" WMD claim.
While the future and the past of Iraq were being discussed in London, Baghdad was burning in the present, as fire engines were still dousing the smouldering car wrecks and the ambulances were still carefully collecting the remains of some of the 127 people who had been blown up in the co-ordinated blasts that hit the capital.
Despite the progress in reducing levels of violence, clearly Iraq remains a highly dangerous and significantly underdeveloped place. In the first six months of this year only 25,000 Iraqis returned to the country and 4.6 million Iraqis remain internally and externally displaced. In the past six years the country's scores on press freedom and corruption perception indexes have got worse. February's statistics showed only 20% of Iraqis have access to sewage and 45% clean water.