Oil companies plan for Iraq as US report looms

Dubai: As the deadline nears for the US military commander in Iraq to report on the country’s political progress, international oil companies are forging alliances to develop its prized fields.

US General David Petraeus has until mid-September to submit his report to Washington and oil multinationals believe there could be progress on Iraq’s oil law when parliament resumes next month.

Washington has for months pushed Iraq to speed up passage of the oil law and other legislation, seen as vital to curbing sectarian violence between majority Shiites and minority Sunnis.
“With the oil law potentially around the corner, the sense among big oil companies is they have to do something,” said one oil company executive. “Although the reality with the security situation is that they can’t do anything on the ground.”

Oil companies have been manoeuvring for years to win stakes in Iraq’s oilfields. Iraq has the world’s third-largest oil reserves, and companies hope the new law will allow them a rare opportunity for access to the Middle East’s energy resources.

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“It’s a dynamic situation,” said another oil company executive. “Most companies are keeping their powder dry regarding partnerships. What if you pick the wrong one? Some companies may be positioning to buy others or sign deals once things change in the south.”

Dozens of companies looking for future contracts have signed memorandums of understanding with Iraq since the US-led invasion in March 2003, providing field studies, technical assistance and training for Iraqi officials.

Gulfnews