Published Jun 23 2009 by Energy Bulletin
Archived Jun 23 2009

Iraq - June 23

by Staff

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Iraq: The final countdown

Patrick Cockburn, The Independent
On 30 June the last US troops will pull out of the Iraqi cities. America's great adventure in Iraq is ending. Already there are few US military patrols in Baghdad. The American-held area of the Green Zone, for long a forbidden city in the middle of the capital, has been squeezed in size. The hotel that Baghdad taxi drivers fondly believed was the headquarters of the CIA has removed the concrete wall protecting it and reopened for public business. The knowledge that all US military forces will be out of Iraq by the end of 2011 immediately reduces American influence in Iraq. No Iraqi wants to nail his flag to the mast of a departing ship, which is one reason why Washington for so long resisted setting a timetable for a US troop withdrawal...

...People in Baghdad today are less tense and fearful than they were six months ago, but they are still wary and suspicious. They keep saying that what happened before could happen again. Probably, they are wrong, but it is impossible for anyone living in Baghdad today, having experienced the butchery of the recent past, not to live under its shadow...

...Iraqis will not come to love each other in the foreseeable future, but this does not necessarily mean they will try to kill each other...The one war which might still take place is between the Kurds and the Arabs. The Kurds were the heart of the old opposition to Saddam Hussein...

...When I first came to Iraq 32 years ago, diplomats cheerily forecast a prosperous future for the country because, however bloodthirsty the Baathist regime, it was "the only Arab country with plenty of oil and water and a large enough population to exploit both." Like many diplomatic clichés this turned out to be untrue on most counts. As violence ebbs, Iraqis are beginning to notice that the two main resources on which they entirely rely are both running short...Fortunately, Iraq no longer depends on its own agriculture to feed itself. Instead it has become one of the world's largest food importers. The rationing system, at a cost of $6bn a year, gives Iraqis just enough cheap food to fend off starvation. But this food is paid for by oil revenues and these have been going down at frightening speed. A reason for this is the decline in the price of crude from $140 last year to less than half that today. But more devastating to Iraq is that production from their great oilfields is falling. These are the so-called super giants, nine oilfields with reserves over five billion barrels, which hitherto have been some of the most productive in the world. Oilfields like Kirkuk and Bai Hassan in the north and North and South Rumaila, West Qurna and Zubair in the south, appeared an endless resource which, in the long term, would bail Iraq out of whatever trouble it was in. But now even they are beginning to fail because of neglect, under-investment and mismanagement.

...Surprisingly, these epoch-making developments in the way Iraq's oil wealth is controlled and exploited are hardly noticed abroad outside the oil industry and the specialist business press. Yet their outcome will do much to determine how people live in Iraq over the next century and will have an impact on the energy supply of the whole world. Iraq is currently estimated to have the third-largest oil reserves in the world, but the western and southern deserts are largely unexplored and may contain another 45 to 100 billion barrels of recoverable crude. "According to independent consultants," says the US Department of Energy, "the cluster of super-giant fields of south eastern Iraq forms the largest known concentration of such fields in the world and accounts for 70 to 80 per cent of the country's proven oil reserves." No wonder the determination of the international oil companies to get a stake in Iraqi oil development, even if the precise terms of the present contracts are not to their liking. Just how much oil the world possesses will be determined as they explore what deposits lie beneath the dreary deserts and salt marsh around Basra.
(23 June 2009)

Kurdistan brands Iraq oil contracts 'unconstitutional'

Iraq's autonomous Kurdish region hit out at Baghdad on Tuesday, describing oil and gas contracts due to be awarded by the federal government at the end of this month as "unconstitutional".

Iraq is due to announce which of 31 foreign and state-owned bidders have won deals to operate six major oil fields and two gas fields, for which the government will pay fees rather than share profits, on June 29 and 30.

The Iraqi oil ministry and Kurdistan, however, are at loggerheads over how international companies involved in the tapping of the nation's vast energy reserves should be paid.

Iraq's decision to award service contracts differs from Kurdistan, where numerous profit-sharing deals have been struck...
(23 June 2009)

7 Blasts Around Baghdad Kill at Least 24

Marc Santora, New York Times
Seven bomb blasts in and around Baghdad on Monday killed at least 24 people and wounded scores, including 3 American soldiers, while a series of firefights in the northern city of Mosul left 7 people dead, according to Iraqi security officials.

The spate of violence renewed concerns that extremists would step up their attacks as the June 30 deadline approached for American troops to withdraw from Iraqi cities...
(22 June 2009)

Rush for ‘easiest oil in the world’

Danny Fortson, The Times
This month an Iraqi politician will appear on television to open envelopes and reveal the winners of a long and hard-fought contest. In the balance hangs the wellbeing of 28m people, tens of billions of dollars of contracts and how much you and I pay for everything from yoghurt pots to petrol.

It should make good viewing. For the hopeful contestants, it has been a long wait — since 1972 to be exact. That was when the Iraqi oil industry was nationalised and foreign operators were booted out.

Now the oil giants have been invited back. At the ceremony on June 29 and 30, Hussain al-Shahristani, the oil minister, will reveal which of them will be the first to be let back into the south of the country, where most of its oil and gas resources are found.

Up for grabs are 20-year concessions to operate six huge oilfields and two gas fields. In all, 32 companies are bidding, including BP, Shell, Sinopec of China, Lukoil of Russia and Total of France...
(14 June 2009)