Sunday, December 13, 2009

u.s. firms lag in bids for iraqi oil

WaPo | Chinese, Russian and European companies won the right this weekend to develop major oil fields in Iraq, while U.S. firms made a paltry showing at auctions that represent the first major incursion of foreign oil companies into Iraq in four decades.

The companies that secured 10 contracts in auctions held over the weekend and in June stand to profit handsomely, but they are taking a significant gamble.

Iraq has the third-largest proven crude reserves in the world, but the country remains perilous; it suffers from chronic corruption and acrimonious politics that have prevented the passing of new laws to regulate the sector.

Of the seven U.S. companies that registered for the auctions, only one emerged as the leading partner in a consortium that won a contract. Another U.S. company has a minority stake in a contract.

China's state-owned oil company has a major stake in two contracts. Russian firms are parties in two others.

European firms made a strong showing. Royal Dutch Shell, Italy's Eni, British Petroleum and Norway's Statoil got deals.

Companies from Malaysia and Angola were parties to five winning bids.

Oil analysts say the outcome was surprising, considering that U.S. oil companies have long yearned to work in Iraq.

The analysts said it is ironic that U.S. companies do not appear poised to cash in on the aftermath of a war that many in the United States and the Middle East argued was motivated by a desire to tap into Iraq's oil reserves.