Friday, July 04, 2008

What should Big Oil's role in Iraq be?


There is no question that Baghdad needs the expertise and capital of international oil companies to kick-start its oil industry.

Thirty years of war, sanctions and poor government have left the country's oil infrastructure in tatters.

Despite having the world's third-largest proven oil reserves, Iraq's production of 2.5 million barrels a day is only the 12th biggest. And although production has recently recovered to the levels seen before the 2003 US-led invasion, it is still about 1 million barrels a day below its peak in the late 1970s.

What is at stake now is how it revives its oil industry and the role that Big Oil will play.
If it was left to the oil companies and their political supporters in the West, they would be quickly granted a share of Iraq's oil in return for heavy investment in the country.

But most Iraqis are unhappy with this formula. They don't agree that Iraq should give away its principal asset to foreign companies. Instead, they feel that the role of the international oil companies should be limited to that of contractors paid a fee to carry out work.

To see the full article please click on the title

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