Baghdad opens to foreign oil companies
Baghdad (AsiaNews/Agencies) - Iraq has begun to open its oil industry to foreign investment, in order to increase production. Meanwhile, the atmosphere is hopeful in Baghdad, as attacks diminish and life returns to normal. But a scandal is exploding over the diversion of humanitarian aid for the population, until 2003.
Yesterday, Iraq confirmed that it wants to open to foreign investment the development of six large oil fields: Rumaila, Kirkuk, Zubair, western Qurna, Bai Hassan, and Maysan. For now, Baghdad wants to pay for technical consulting from foreign companies without giving away oil rights, as the multinational companies are asking. The government has contacts with at least 41 foreign companies, which it wants to involve in specific operations together with local companies, which are supposed to receive at least 25% of the value of the contracts. Iraq has oil reserves equal to about 115 billion barrels, the third largest in the world, but produces "only" 2.5 million barrels a day, even though this is the highest rate of production since the U.S. invasion in 2003, and is intended to be increased to 2.9 million by the end of 2009, and to 4.5 million in five years.
Oil minister Hussain al-Shahristani observes that Iraq wants to be "the second or third largest exporter", but needs technology and foreign funding to modernise its infrastructure.
Openness to foreign oil countries could foster greater investment in other sectors, which until now have been blocked by widespread violence. But for months, the situation appears to have improved, not only because of the increase of U.S. military forces in the country, but also thanks to a different approach that - as indicated in the "Counterinsurgency Guidance" distributed to the soldiers - emphasises respect and assistance toward the civilian population. Washington is also promoting microcredit for shops and small businesses in Baghdad - about 2,500 dollars for each, according to local sources - fostering the resumption of commercial activity, and has also hired many of the local young people to help with neighbourhood security, guaranteeing them a source of income that many would otherwise have sought among the extremists. Although the situation in the country "remains volatile and dangerous", as a report from the U.S. Congress says, attacks have fallen well below the more than 1,000 per week as of a year ago, and are at the lowest level in the past four years.
Meanwhile, yesterday the Iraqi government filed suit in a New York court against dozens of foreign companies, asking for 10 billion dollars in damages for what has been called "the largest financial fraud in human history", under the UN oil-for-food programme. From 1996 until 2003, the programme allowed Iraq to sell crude oil in exchange for medicine, food, and essential goods, bypassing the embargo decreed because of Iraq's invasion of Kuwait in 1990. But now, a UN inquest accuses about 2,200 companies in 66 countries of paying 1.8 billion dollars to local officials in exchange for the awarding of contracts, depriving the population of the equivalent of billions of dollars of aid. The companies accused include the multinational Chevron, and Swiss company Vitol. (PB)
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