No boon for US in Iraq oil deals

• Source: Global Times
• [01:18 December 14 2009]
• Comments

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 US oil firm.

Foreign state oil firms, less mindful of profit margins than publicly traded firms, and those used to operating in riskier environments were heavily represented among bidders.

Also, US oil firms already have multi-billion-dollar deals to build 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.

Amid the financial crisis, whether the bids are treats or traps, still remains unclear, said Zeng Tao at the 21st Century Business Herald newspaper.

Reuters – Global Times