Iraq's oil
I found this an interesting assessment of foreign investment in Iraq's oil industry. Short version, the majors are still steering away for two reasons. The number one reason is obviously security of their workers which the head of Shell said, "It's too soon to make a judgment on how close we are. I suspect we could be a few years away."
But more tellingly for those, like myself, who are more concerned with the war than the oil, is the underlying problem of the Iraqi Constitution and uncertainty as to who the oil "belongs to."
Like several other major areas of dispute, ownership and revenue splits on Iraq's oil reserves were glossed over in the effort to get a Constitution signed by a deadline. (It was late you'll remember.) There are substantial and meaningful disagreements over who owns Iraq's various reserves. Do the Kurds own the Kirkuk fields outright? What percentage do the Sunnis get from national sales? Does the national government have precedence? How much can the southern Shia extract as the chokepoint on tanker based exports?
This will be a major source of conflict going on into the future of Iraq.
(Another dispute that was glossed over was the role of Islam in the government, and whose version of Islam.)
Also: Unrelated I'm sure, oil hit a new record yesterday, $75.42/barrel.
But more tellingly for those, like myself, who are more concerned with the war than the oil, is the underlying problem of the Iraqi Constitution and uncertainty as to who the oil "belongs to."
Like several other major areas of dispute, ownership and revenue splits on Iraq's oil reserves were glossed over in the effort to get a Constitution signed by a deadline. (It was late you'll remember.) There are substantial and meaningful disagreements over who owns Iraq's various reserves. Do the Kurds own the Kirkuk fields outright? What percentage do the Sunnis get from national sales? Does the national government have precedence? How much can the southern Shia extract as the chokepoint on tanker based exports?
This will be a major source of conflict going on into the future of Iraq.
(Another dispute that was glossed over was the role of Islam in the government, and whose version of Islam.)
Also: Unrelated I'm sure, oil hit a new record yesterday, $75.42/barrel.
posted by mikevotes at
8:22 AM
6 Comments:
Yea, I read that this morning. Whenever I read an article like this my mind drifts back to Wolfowitz' testimony (which I had the displeasure of seeing live) when he argued the Iraqi's would be able to fund their own re-construction "virtually immediately."
Looks like they hit a couple of snags on the way.
By
Praguetwin, at 8:42 AM
Well, in the war in his head, that was the case. Because, remember, the Iraqis were going to welcome us and our "christianizing" efforts.
(Sorry, that should be "freedom giving" efforts. Sometimes I get my imperial rhetoric crossed up across empires.)
Mike
By
mikevotes, at 8:51 AM
LOL!
What a great image: the war in Wolfowitz' head. Roses everywhere, soldiers kissing babies. Lots of ticker-tape.
Still, even if that happened, the numbers really don't add up (especially if you assumed that oil would stay steady at about $35).
This weeks oil numbers are more of a response to N. Korea and the fact that inventories have dropped sharply two weeks running. Summer driving.
By
Praguetwin, at 9:00 AM
Yeah, I agree, and I think you need to add Iran's apparent refusal to meet the west's July 12(?)deadline.
Mike
By
mikevotes, at 9:12 AM
The price spike is down to NK's little rockets. But some analysts are claiming that as an excuse for speculators to drive up prices.
I tend to agree with the analysts.
By
Cartledge, at 10:54 AM
I don't know Cartledge, I've seen the same thing. It's really a question of whether the risk premium reflects real risk Iran, N Korea, Iraq, rising US-Russia tensions, or that's an excuse.Those who hold the futures do have a vested interest in hyping risk.
Mike
By
mikevotes, at 1:18 PM
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