Iraq Cancels Six No-Bid Contracts, 09/10/08

Iraq's Oil Minister, Hussain al-Shahristani

Iraq's Oil Minister, Hussain al-Shahristani announced that six no-bid contracts for oil companies in Iraq were no longer available. al-Shahristani cited The fact that negotiations had gone on for so long that oil companies would no longer be able to complete work in the allotted time frame. The contracts with Exxon Mobil, Chevron, Shell, Total, BP and several smaller companies for one-year deals are no longer available. The deal, which was not particularly lucrative by industry standards, provided a foothold in one of the world's most oil-rich nations. The deal provided for Iraq's oil production to be boosted by up to 500,000 barrels of oil a day, which also happens to be the amount agreed upon by OPEC members to reduce daily output. The contracts are now open to bidding from anyone willing and able. Had the contracts gone through, it would have been the first deal with the central government concerning oil production since the fall of Sadaam Hussein. However, since that time, Iraq has made large deals with China's National Petroleum Corporation. Earlier this summer, a group of Democratic senators led by Chuck Schumer of New York had appealed to Secretary of State Condoleeza Rice to block the deals, contending that they could undermine the efforts of Kurds, Sunnis and Shiites to reach agreement on a hydrocarbon law and a revenue-sharing agreement. This criticism was conveyed to Mr. Shahristani by the American Embassy in Baghdad in late June, and after that the deals were delayed. Nevertheless, the Oil-Ministry of Iraq has decided to pursue revving up production of oil and has open contracts available for bidding.

See the article here. -V