Tuesday, 15 December 2009

At least two obstacles overcame

With his head shaved at the annual Muslim Hajj as a symbol of renewal, Iraqi Oil Minister Hussain Al-Shahristani didn't let the smile to abandon his flushing face when he was awarding seven of ten oil projects offered in Iraq's second bidding round on 11-12 December.

That weekend picture contradicts the picture of June 30 when Al-Shahristani inaugurated his first bidding round which offered six oil and two gas fields to International Oil Companies for long-term development.

The then huge gap between the prices asked by IOCs and what Iraq was ready to pay made it extremely difficult to him and senior officials to secure more than one deal, leaving them pale and somehow nervous. And even they were seen as if they were begging when allowing more time to the executives to reconsider the prices.

I think with the latest success in its second round, Iraq has overcome at least two challenges or obstacles in the way of developing its dilapidated oil industry.These are the worries about the security situation and the absence of the oil law.

When Iraq started planning to lure IOCs, analysts and critics, said that the security situation would prevent the IOCs from landing in Iraq. And when the security situation started to improve, they said the absence of the oil law would discourage the IOCs from doing business with Iraq.

And now they are saying that these deals could not be honored by the new government to be born after the March 7 national elections. And the contracted companies have put inflated or fake production targets to deceive Iraqis and scoop up the deals.

And we'll see.

For detailed coverage for Iraq's 1st and 2nd bidding round go to: www.iraqoilforum.com

kassakhoon@gmail.com

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