Security issues still shadow Iraqi oil

Iraq’s recent moves to open its vast oil fields to international companies could help U.S. oil producers that have eyed the region for years and give a boost to Houston’s oil field services sector.

Early this month, Iraq awarded a contract that allows European oil giant BP and China National Petroleum Corp. to develop Iraq’s mammoth Rumalah oil field and is preparing to dole out contracts for other coveted fields.

“If all those things run their course, then there will be more oil field services work coming out of Iraq of a reasonably substantial nature throughout 2010,” said Nick Gee, vice president of investor relations at Weatherford International, a Geneva-based firm with large operations in Houston.

“As long as Iraq does not have a basic legal framework to really manage and regulate energy-related activities, it will remain extremely risky for any company to really go in completely reassured. We’re just not there yet,” said Rochdi Younsi, director of Middle East and Africa for the Eurasia Group in Washington.

Prospects for new business in Iraq will likely be a discussion topic this week as oil field services giants Weatherford, Halliburton and Schlumberger kick off quarterly earnings season in the Oil Patch.

Such concerns have fueled uncertainty about when Iraq’s oil fields will truly be open for business.

“We believe something will happen in 2010,” Andrew Gould, CEO of oil field services giant Schlumberger, told analysts in April. “But what’s going to happen and with whom, we really don’t have a good view today.”

Houston Chronicle