My respect for the Iraqi government continues to wane as they seem poised to award initial oil development contracts to China, India, Vietnam, and Indonesia rather than to American companies. The amount of money the Iraqis owe us just for military operations is nearly incalculable, and a few oil deals would have been a worthy show of appreciation for all we've done for their country. Instead, the contracts go to our competitors and at least one potential enemy.
While Iraqi lawmakers struggle to pass an agreement on exactly who will award the contracts and how the revenue will be shared, experts say a draft version that passed the cabinet earlier this year will likely uphold agreements previously signed by those countries under Saddam Hussein's government.
I'd like America to step in and void these contracts as the price for doing business with a tyrannical, fascist thugocracy, but as Austin Bay notes it probably is best for the Iraqis to make their own decisions at this point. Still, a little gratitude wouldn't be out of order. Maybe I'm making a big deal out of nothing... I hope Antonia Juhasz is right and American companies do have a plan to participate in the Iraqi oil market.
Steve Kretzmann, executive director of Oil Change International, an industry watchdog group, criticized the draft oil law for allowing long-term oil contracts to be awarded to foreign oil firms, a practice he said was unique in the Middle East.
"Giving out a few crumbs to the Chinese and Indians is one thing," said Kretzmann, who noted the draft law was seen by both the Bush administration and the International Monetary Fund before it was given to Iraq's parliament. "But the real prize are the contracts that award long-term rights. I think the [Western oil companies] are biding their time."
(As a side note, the practice of giving long-term oil contracts to foreigners is required in the Middle East because few of the oil-producing nations in the region have the knowledge or expertise to exploit their own natural resources.)