Iraq: Enthusiasm doesn’t guarantee a good party

There is clearly much enthusiasm about Iraq’s impending oil contract bidding round. After all, it marks the first time since nationalisation that international oil companies will be able to return to Iraq’s massive oil reserves. For Iraq, boosting the production of its oil – or at least making sure it does not decline – is the single most important thing the country can do to ensure its financial future. And so far, Iraq’s national oil company has shown that it can’t do it by itself.

But the bid opening ceremony in Baghdad on Monday and Tuesday is far from a guaranteed celebration.

On the Iraqi side, Hussain Shahristani – the oil minister, the architect of the bidding round and the host of the party – today got a grilling from party-pooper parliamentarians who believe – or at least, believe it is politically expedient to say – that handing off the development of Iraq’s most precious resources to foreigners automatically means the country and its people are getting a raw deal.

Meanwhile, all around the world, guests invited to the ceremony are only nervously making preparations to head to Iraq. Like the jet set heading to the Bronx, most of them are leaving their most precious jewels in the safe and demurring from sending their chief executives.

In spite of all their enthusiasm, the reality is still quite unappetising as the security situation is far from stable. And the state of Iraqi politics is such that the signing might yet be delayed or may not happen after all, regardless of how often Mr Shahristani reiterates that it can’t be.

Related links:

A turning point for Iraq’s oil industry? (FT Energy Source, 11/05/09)
How much will Iraqi politics deter IOCs? (FT Energy Source, 20/04/09)

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