[Marxism] No oil for blood

Marv Gandall marvgandall at videotron.ca
Tue Jun 30 14:18:52 MDT 2009

If the invasion of Iraq was aimed at seizing it's oil supplies on behalf of
US oil interests, as some on the left then simplistically contended, it has
has yet to yield any results. The US-installed Maliki government yesterday
granted the right to develop the prize Rumaila field to a group led by BP
and the largest state-owned Chinese oil corporation rather than to consortia
led by US firms ExxonMobil and ConocoPhillips. The invasion was primarily
meant as a demonstration of overwhelming US military power by the Bush
administration designed to cow America's enemies into submission - a
colossal strategic blunder which had the opposite effect of what was

BP, China win right to develop Iraq's Rumalia oil field
Anthony DiPaola and Maher Chmaytelli
Bloomberg News
Tuesday, June 30, 2009

BP PLC and China National Petroleum Corp. won the right to develop Rumaila,
the largest Iraqi oil field in today's licensing round, as the war-torn
country seeks to more than double production over the next six years.

The BP-led group beat a bid from Exxon Mobil Corp. and Malaysia's state oil
company, an Oil Ministry spokesman in Baghdad said. Six oil and two gas
fields in today's bidding round may yield US$1.7-trillion in profit over 20
years for the country, Oil Minister Hussain al-Shahristani said in a speech
broadcast on live television.

"This is the only resource of wealth available to us at this time," Prime
Minister Nuri al-Maliki said in a speech at the start of the licensing round
in Baghdad today, where foreign oil companies are bidding for service

Eight of the world's top 10 non-state oil producers, including Royal Dutch
Shell Plc and ConocoPhillips, are vying for the right to help Iraq develop
the country's oil and gas resources. More than 30 companies are bidding for
US$16-billion worth of technical service contracts for the fields.

Iraq is inviting international oil companies back into the country after
kicking them out in 1972, when the party of late dictator Saddam Hussein
nationalized concessions. The license round was set to start yesterday and
delayed one day after sandstorms closed Baghdad's airport, preventing oil
executives from reaching the capital with their bids.

‘Revenue is Enormous'

"It's a great move forward for Iraq and the revenue is enormous," Peter
McGuire, managing director of Commodity Warrants Australia, said in a
Bloomberg TV interview on Monday. "So it's a massive amount of money for
Iraq, huge."

Holder of the world's third-largest oil reserves, Iraq is struggling to
raise output and revenue from crude sales after six years of conflict and
prior sanctions destroyed the economy and infrastructure. The government
aims to boost oil output to 4 million barrels a day within the next five
years, from about 2.4 million barrels.

U.S. combat troops, under agreement with the Iraqi government, left the
country's cities today in a step toward a planned full withdrawal by the end
of 2011.

Shahristani defended the oil round in parliament last week after Prime
Minister Nuri al-Maliki's government was criticized by lawmakers for failure
to raise oil production faster and because of concerns the deals won't
benefit Iraq. The government will support the winning bidders in developing
the fields, al-Maliki said today.

BP Wins Rumaila

The BP-led group beat a bid from Exxon and Petronas Carigali Sdn. Bhd. for
Rumaila after improving their offer, the ministry spokesman said. The Iraqi
government set a requirement that bidders agree to produce crude from the
field at a cost of US$2 a barrel, lower than the price BP and Exxon
initially bid.

Rumaila, which now produces 956,000 barrels of oil a day, is the largest
field on offer and the first awarded today. The BP group proposed to boost
Rumaila's output to a plateau of 2.85 million barrels of oil a day at an
average cost of US$3.99 a barrel, according to the bid presentation.

The Oil Ministry had given the BP and Exxon groups time to improve their
offer to develop the Rumaila field after neither offer met the government's
minimum requirements.

BP spokesman Toby Odone in London said the company is "looking forward to
the next step toward finalizing the service contract." The Iraqi Cabinet
will approve the winning bids within a week, al-Shahristani said.

Mansuriya, Bai Hassan

Iraq received no bids for the Mansuriya natural gas field, the second it

ConocoPhillips was the only bidder for the Bai Hassan oil field. A group led
by Italy's Eni SpA dropped its bid to develop the Zubair oil field in
southern Iraq after it rejected to lower the proposed cost. A group led by
China National Petroleum also dropped its bid for Zubair.

Shell bid to develop the Kirkuk oil field, together with China Petroleum &
Chemical Corp. and Turkish Petroleum Corp., Shell spokesman Adam Newton said
by telephone today.

The fields set to be awarded collectively produce a total of about 2 million
barrels of oil a day, al-Shahristani said at the start of the licensing

Iraq later this year plans to hold a second auction round for 11 oil and gas
fields with the aim to boost production to about 6 million barrels a day by
2015. Saudi Arabia, the world's biggest oil exporter, produces 8 million
barrels a day.

More information about the Marxism mailing list