U.S. Contractors ‘Hold Sway’ in Iraqi Oil

In my recent interview on the Alyona Show, Alyona mentioned that American oil companies didn’t necessarily get the biggest share in oil after the U.S. invasion of Iraq. Well…

New York Times:

When Iraq auctioned rights to rebuild and expand its oil industry two years ago, the Russian company Lukoil won a hefty portion — a field holding about 10 percent of Iraq’s known oil reserves.

It seemed a geopolitical victory for Lukoil. And because only one of the 11 fields that the Iraqis auctioned off  went to an American oil company — Exxon Mobil — it also seemed as if few petroleum benefits would flow to the country that took the lead role in the war, the United States.

The auction’s outcome helped defuse criticism in the Arab world that the United States had invaded Iraq for its oil. “No one, even the United States, can steal the oil,” the Iraqi government spokesman, Ali al-Dabbagh, said at the time.

But American companies can, apparently, drill for the oil.

In fact, American drilling companies stand to make tens of billions of dollars from the new petroleum activity in Iraq long before any of the oil producers start seeing any returns on their investments.

Lukoil and many of the other international oil companies that won fields in the auction are now subcontracting mostly with the four largely American oil services companies that are global leaders in their field: HalliburtonBaker Hughes, Weatherford International and Schlumberger. Those four have won the largest portion of the subcontracts to drill for oil, build wells and refurbish old equipment.

I have argued that the war in Iraq was about oil not in the sense of access, but primarily for control. American oil companies, especially Exxon Mobil, won out big after the U.S. invasion, with other countries like Russia making out even bigger. But with a troop presence remaining indefinitely and with American contractors having the largest stake in, say, drilling as opposed to refining, marketing, and selling, that control has been achieved.