Western Oil Companies Back in Iraq With Unusual Contracts

LibertySugar — Thu, 19 Jun 2008 11:02:44 -0700

Thirty-six years after Saddam Hussein nationalized oil and kicked out Western companies, Iraq's Oil Ministry has awarded Exxon Mobil, Shell, Total, and BP contracts set to bring the oil giants back.

Despite the fact that high oil prices put these contracts in high demand, Iraq granted very unusual no-bid contracts, meaning the companies did not have to compete with their counterparts in China, Russia, and India. Today's New York Times explains:

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.

The oil companies assure that they intend to help Iraq rebuild its neglected oil infrastructure. To see how, read more.

Private companies will bring new technology and expertise to Iraq, as well as new oil revenue to help rebuild other infrastructure. Interestingly, the contracts, designated as "service contracts" to be paid with oil, circumvented any legislative approval.

For a more in-depth explanation on this unusual, yet seemingly predictable development, check out the whole NY Times story. Would it have been better if Western oil companies came back to Iraq under less exceptional circumstances?

Source

The Story Fueling Our Gas Woes. Is Gas Your #1 Concern?

CitizenSugar — Tue, 29 Apr 2008 08:00:16 -0700

If a trip to the gas station has left your wallet lighter than air, it's comforting to know someone's getting fat off of fuel costs: Big Oil. BP and Royal Dutch Shell just reported massive increases in profits for the first three months of 2008. BP's gross (that's an understatement) profits rose 48 percent in the first quarter to $6.6 billion while Shell increased its profits 12 percent to a record $7.8 billion.

Surely their good fortune driven by the rising oil prices has made them generous? Nope. The companies have passed growing costs right on to consumers to shell out big bucks at the pump. We've reached the top (or bottom) though, right? Well, the head of OPEC has just warned that the price of oil could hit $200 a barrel. And pity your friends in the UK - speculation is likely to push petrol to £5 (that's about $10) a gallon today. I say, "ouch!" ol' chap.

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One positive gas-goody (?): It's bringing Clinton and McCain together. Clinton has just joined McCain calling for gas tax relief saying,

“This is one of the big differences in this race. My opponent Senator Obama opposes giving consumers a break on the gas tax at the federal level. I support it. I understand the American people need some relief.”

A recent survey shows gas is the #1 concern, over jobs and health care with 44 percent of participants saying paying for gasoline was a "serious problem" for them. Is it for you? Is fueling your life a serious problem? Are you surprised by the record profits? Should Big Oil be involved in a solution?

TresSugar

Western Oil Companies Back in Iraq With Unusual Contracts

The Story Fueling Our Gas Woes. Is Gas Your #1 Concern?