Iraq to cancel three oil deals

[Thinkerman]

So it wasnt about oil.......

 

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Iraq to cancel three oil deals

By Charles Clover in Baghdad

Published: May 25 2003 22:20 | Last Updated: May 25 2003 22:20

 

 

Iraq's oil minister announced yesterday that three oil production contracts signed by the previous regime with Russian and Chinese companies would be either terminated or frozen, according to Reuters news agency.

 

 

The move seems likely to plunge Iraq into complex international litigation, just days after the United Nations voted to end sanctions against Iraq.

 

Thamir Ghadhban, US- appointed oil minister, said a contract with the Russian oil giant Lukoil had been terminated, while another contract with a Chinese company to develop al-Ahdab field had been frozen by "mutual agreement". The fate of the third contract was unclear.

 

French, Russian, and Chinese companies received the lion's share of the services and production contracts under the old regime, as their governments were the most supportive of Iraq on the United Nations Security Council.

 

Phillip J. Carroll, the former Shell executive chosen by the Pentagon to advise the oil ministry, said there was some doubt whether existing foreign contracts "gave the Iraqi people the full benefit of their oil wealth".

 

In an interview with the FT, Mr Carroll said there was scope for renegotiating some existing oil deals with foreign oil companies. "Each one of these contracts will have to be examined, in the first instance, in terms of their legal status and standing. Someone working for the ministry would have to say, 'Do we have an enforceable contract here between Iraq and some other entity or is this merely an incomplete process of negotiation?' " he said. "There were some, but relatively few, fully signed and operative contracts.

 

"Secondly, if the contract is deemed to be incomplete or flawed in some way, they have to then examine the commercial terms - if they are fair to both parties, and if it's something they want to go ahead with. Several of these contracts have cast doubt as being overly generous to one party."

 

While taking aim at Russian and Chinese companies, Mr Ghadhban said he was nevertheless in favour of opening up Iraq's oil industry to foreign investment: "We are going to open the door for foreign investment but in accordance with a formula that safeguards the interest of the Iraqi people."

 

Iraqi production was currently at 800,000 barrels a day of crude oil, he said. Exports could begin within the next few weeks.

 

Mr Carroll confirmed that the former regime had developed a strategic plan to increase production capacity fr om 3m b/d to 6m b/d in six to seven years at a cost of $25bn-$30bn. Such a scheme would eventually enable Iraq to challenge Saudi Arabia as the largest oil exporter in the world.

 

At that point, he said, Iraq would have to decide whether to continue membership in Opec, which puts a cap on production levels, and how to attract foreign investment.

 

Mr Carroll was careful to say that it was up to an Iraqi government to decide both these issues.

 

"It's not something I have any interest in, it is a decision of a sovereign government of Iraq."

 

source; Ft.com

[LANDER]

Not very surprising is it Shujui?

you probably also heard about how dick cheney's old company "haliburtun" (I think) received the biggest contract to rebuild Iraq's oil industry (worth billions of dollars, huge!!!) whitout even having a biding process with other US companies.