BAGHDAD (Reuters) - Critics said the 2003 U.S. invasion of Iraq said was driven by oil, but United States oil majors were largely absent from an Iraqi auction of oil deals snapped up instead by Russian, Chinese and other firms.
Iraqi officials said this proved their independence from U.S. influence and that their two bidding rounds this year for deals to tap Iraq’s vast oil reserves, the world’s third largest, were free of foreign political interference.
The Oil Ministry on Saturday ended its second bidding round after awarding seven of the oilfields offered for development, adding to deals from a first auction in June that could together take Iraq up to a capacity to pump 12 million barrels per day.
“For us in Iraq, it shows the government is fully free from outside influence. Neither Russia nor America could put pressure on anyone in Iraq -- it is a pure commercial, transparent competition,” said government spokesman Ali al-Dabbagh.
“No one, even the United States, can steal the oil, whatever people think.”
Russia’s Lukoil on Saturday clinched a deal to develop Iraq’s supergiant West Qurna Phase Two oilfield after having failed to convince Iraq to bypass the auction and revive an old Saddam Hussein-era deal for the field.
During a visit to Baghdad earlier this year, Lukoil
executives had invited the press to a news conference where they had expected to announce the renewed Saddam deal. After a few terse comments, they left empty-handed and visibly annoyed.
Only one U.S. firm bid in the second round, and of the four fields bid on by U.S. firms in the first round, only Exxon Mobil won a major prize, leading a group to clinch a deal for the supergiant West Qurna Phase One field.
U.S.-based Occidental came away with a quarter stake in a consortium that won a contract for the giant Zubair field.
By contrast, Chinese state oil firms were involved in every first round bid and made a strong showing in the second.
“The results of the bid round should lay to rest the old canard that the U.S. intervened in Iraq to secure Iraqi oil for American companies,” said Philip Frayne, a spokesman at the U.S. embassy in Baghdad.
NO U.S. OIL BONANZA
The results run counter to predictions of some critics of the U.S.’ 2003 Iraqi invasion, who envisaged domination of Iraqi oil by U.S. oil majors.
“We haven’t really seen U.S. companies, and that is because of intense competition ... The issue is financial and technical and not at all political. This confirms Iraq can manage its oil policy and activities without politicization,” said Thamir Ghadhban, a prime ministerial advisor and former oil minister.
The terms of Iraq’s 20-year oilfield service contracts were seen by analysts as tight, and the legal ambiguity and security issues involved in a country still plagued by bombs and near constant political crisis may be a deterrent for some.
“The terms are not exactly what everybody had hoped for. The bids are based on very ambitious assumptions in terms of stability -- the contract terms themselves and collaboration with the local (state oil) company and government,” said a senior executive at a U.S. oil firm who declined to be named.
Foreign state oil firms, less mindful of profit margins than publicly traded firms, and those used to operating in riskier environments such as China’s CNPC and Angola’s Sonangol, were heavily represented among bidders for Iraqi fields.
Also, U.S. oil firms already have multi-billion dollar deals to build new refineries in Saudi Arabia, and a presence in the United Arab Emirates and Qatar. They may not be under as much pressure as other firms to secure a foothold the Middle East.
Additional reporting by Missy Ryan and Simon Webb; Editing by Michael Christie and Victoria Main
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