Iraq opens its doors to foreign oil majors after 35 years; US hand seen

01 July 2008

Five years after US-led troops invaded Iraq to oust the Baathist government of slain President Saddam Hussein, the new pro-West Iraqi government yesterday opened international bidding for six oil fields that should see the return of major oil giants, notably the US- and UK-based oil companies, which are said to be best positioned to benefit from the decision.

 A team from the US State Department is said to have had a major role in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of these fields, providing confirmation of of direct involvement by the Bush administration in the decison of the Iraqi government, a report in the New York Times said yesterday. The current Iraqi government is dependent on the support of the US and other Western military forces for its survival.

According to the report advisers from the US State, Commerce, Energy and Interior Departments are assigned to work with the Iraqi oil ministry and in addition, the United States Agency for International Development has a contract for Management Systems International, a Washington consulting firm, to advise the oil and other ministries.

The current Iraqi government has so far been negotiating short-term no-bid contracts with several US and European oil companies, that include Exxon Mobil Corp., Royal Dutch Shell, Total SA, Chevron and BP, which strengthens the clims of the critics of the invasion who say the war was meant to wrest control of the region's oil resources.

The latest decision allows foreign oil companies to do business in Iraq for the first time in over 35 years .

The newspaper also said that three Democratic senators, led by Charles E. Schumer of New York, sent a letter to the State Department last week asking that the deals be delayed until after the Iraqi Parliament passes a hydrocarbons law outlining the distribution of oil revenues and regulatory matters. They contend the contracts could deepen political tensions in Iraq and endanger American soldiers.