The New York Times reports on how terrorist attempts to derail the auctions of Iraqi oilfield development rights have failed, and the process went ahead as planned. “The terrorists tried to send a message to the oil companies through the bombings,” the oil minister, Hussain al-Shahristani, declared on Iraqi television. “But this message was not delivered.”
After decades of decline, Iraq’s oil industry looks set to recover its place among the world’s leading producers, perhaps even to challenge Saudi Arabia for the top spot by the end of the decade.
“[If the IOCs] are reasonably successful in delivering on the commitments we’ve made, it is quite likely we will see Iraq increase its production to around 10 million barrels per day within about 10 years,” Tony Hayward, chief executive of BP, told the World Economic Forum at Davos, Switzerland, last month. “[Absent unforeseen political events] the resources there are relatively easy to bring on-stream.”
But Associated Press quotes a more sceptical source from the International Petroleum Week conference in London as saying “I haven’t found a single person who finds that target [12 million bpd] achievable … it’s much lower than that, but even so, Iraq is a complete game-changer, even if it delivers half of that.”
And the oil services companies are set to benefit hugely from all this. The success of the auction in December “implies a huge amount of service activity over the next two or three years,” said Andrew Gould, chief executive of Schlumberger, the oil field services giant.
Repairing pipelines, rebuilding terminals, and upgrading all the other infrastructure needed to get the oil to the market should be worth billions to the likes of Halliburton, Schlumberger and Bechtel.
(Sources: New York Times, Associated Press)