Friday, March 27, 2009

Oil and Iraq

It looks like the future of Iraq will be influenced by the presence of multinational oil companies.

In what ways could their presence influence the future of Iraq? How could they influence the future relationship between Iraq and the USA?

11 comments:

Anonymous said...

This is a tricky situation because in a sense the whole reason we liberated Iraq was to "plant the seed of democracy in the Middle East" and give the people of Iraq freedom and independence. I think I speak for most everyone in saying that the whole world (besides maybe OPEC) has been rooting for the people of Iraq to pick themselves up by the bootstraps and learn to manage their government, finances, and infrastructure on their own. By contracting deals to develop oil fields and increase oil production, Iraqis would potentially generate billions in national revenue and essentially jump-start their economy thereby enabling them to expedite the process of weaning themselves off of US money and military occupation. On the other hand, the US (and by "US" I mean taxpayers and military families) has made incredibly huge financial sacrifices and lost thousands of brave men and women to ensure Iraqis for generations to come can enjoy the privileges we so fortunately do. Now (in my opinion) given that fact, and the fact that the US has now fallen into a recession due, many would argue, in large part to the massive piles of money we've thrown at Iraq in the past several years, I think its only fair that Iraq set up some sort of oil royalties or an oil allowance in order to return the favor.
-Cameron McIntosh, International Relations

Anonymous said...

Certainly the presence of vast oil reserves in Iraq raises the stakes in the ongoing battle for stability in this country. I am not surprised that oil companies are preparing to move in on this lucrative opportunity, as some have certainly argued that oil was the main reason for the Iraq war in the first place. I think the presence of the oil companies is a strong motivator to the Iraqi government to develop and protect its infrastructure, as oil revenues can help substantially with reconstruction and ongoing economic progress. I also think, however, that those who are opposed to stability in Iraq will become more hardened at the prospect of a prosperous Iraq. As to how the US will be affected by these moves, certainly the US wants stability in Iraq and a large supplier of cheap oil. I'm sure the US government is supporting the oil companies in their drive to explore and exploit more of these reserves. If this situation is handled with respect to all parties involved (i.e. no one-sided deals that essentially allow one company or state to rape Iraq of its oil, as was the case in Iran last century) It could be a positive development for Iraq, the US, and the oil companies, with perhaps OPEC and minority factions with Iraq on the "losing" end. Only time will tell what will become of these possibilities.
--Timothy Myer

Anonymous said...

I often wonder whether "planting the seed of democracy" was the main point of the war in the first place. Perhaps the main objective for the architects of Operation Iraqi freedom was to get as many multinational oil companies that are based out of the United States in to Iraq. We know that Mr. Cheney became a made man through private contracors after Operation Desert Storm. Any ways if Iraq can end up producing as much oil as Saudi Arabia could tensions between these two countries crop up. If the new Iraqi government has made some back door deals with the United States this could end up infuriating other OPEC natios such as Saudi Arabia as they could lose some control of the release of oil to the western world. On the other hand if Iraq ends up granting these contracs to MNC's stationed in Russia for instance this could really tick off the United States who pretty much funded the latest Iraq war. We know Special Interests are knocking at the door of the new Iraqi democracy. Until the contracts are handed out it's impossible to know quite how things are gonna shake out. It would seem Iraq will fair quite well as long as we live in a petro fueled world. I would imagine it would leave a bitter taste in the mouths of the Americans if the Russian flag was flying high above the oil fields in Iraq.

Shane Heathers

Anonymous said...

Well, as the article indicates, Iraq is hoping to use its massive oil reserves to make it a powerhouse economy, its resources are simply unable to be tapped into. In the short term, this will probably be a good partnership. Iraq's eager to draw out its oil, as evidenced by the fact they will pay incentives the more oil their cotnractors can extract, and U.S. companies are glad to take first dibs, combined with the fact that an oil producing Iraq will act as a dillutant in OPEC, lessening the other member nations' power over affairs. Iraqis will probably be very glad in the short term that their country can return to its former glory before the sanctions.

In the long term, of course, if Iraq's government owned oil corporation starts to slowly exert its control, or, in an extreme scenario decides to nationalize all its oil fields, while America is still dependant on its oil imports, it will probably only cause great stress to the two countries' relations.

Of course there is a more "capitalist bright side". As relations slowly start to cool down with Iran, there may come a point when there comes a resource competition between the Shi'ite dominated Iraq and Iran, and the Sunni mega-exporters of Saudi Arabia and Kuwait. A big split, even deadlock between the two factions (and their various supporters in OPEC, though nations like Venuzuela would probably be "neutral") could leave them as a weak coalition and the process would begin to deal with the oil trade on a nation by nation basis. This is important because Exxon-Mobil, America's largest oil company, is only the 13th largest in the world, superceded by a slew of national companies from OPEC, who truly drive the price of oil. Such a climate could lessen America's dire interest in the Middle East, or make it worse if regional turmoil spilled over state to state, or could even pave the way, from the consumer based perspective, to drive more private entities to develop "green" energy.

-Chris Judd, IR

Anonymous said...

How can they influence eachother?.....I like I believe many others have been hoping that Iraq will bring itselt out of the times they have experienced and emarge as a democratice country. The people have a lot to learn about that nut I believe so far that step in the right direction have been made. I think that if the two countires (Iraq and US) are to become civil with eachother and maybe one day they can become allies. The US can help westernise them and Iraq may give the US special access to oil fields. And wiht the location of Iraq it would be great for the US military. Maybe they could put a few bases in and conduct operations from even closer to help fight terrorists. So all in all it has the chance or becomeing a very good partnership but also couyld go either way. Only time and actions of both sides will dictate this.

Anonymous said...

David Brown International relations

Anonymous said...

I think Iraq is tired of being the litte guy, they have been stepped on for to long and now they think it is there time and chance to rise. Iraq is getting a power thirst and with this situation they feel they can make a better economy for theirselves, it doesn't seem like they are trying to help anyone else. How do they expect to build their economy with out the help from others, not one country can come out of this recession by it's self, it will take the world as one to do such a thing. How can they leave the ones that helped them so much lately fall even deeper due to there crazy actions. An old saying says do one to others as others have done to you. Im not sure Iraq is understanding this statment but, maybe they should return the many favors the whole world has given them. Iraq needs not to focus on a power thirst or oil but, to why so many men and woman have given thier lives for and thats thier freedom and to keep their way of life. I'm sure the outcome of this won't be one they expected and we will soon find out.

-Brandon White internation relations

Anonymous said...

Some say we went to war to help fight terroist, and otehrs say we went to fight for oil.

The over all picture doesn't look to good right know. Who knows what we where thinking when we went to iraq, maybe we did go over to help fight for freedom, or maybe it was for oil. WE may never know!

No one really knows what will happen to the U.S and Iraq's relationship. Who knows maybe they will once in for all stop selling oil to us and pay us back for the damage we have cost them, Or maybe we'll be friends and be one of there top consumers. If we barter right maybe we'll have a secrect access to their oil fields. This certanil will make iraq a very powerfull nation if they get what they want, and the war overall might turn out to be harder than we thought. I believe it would be good overall for iraq to sell there oil and make profits, this would hopefully assist them in the beginning of a new age, and maybe they will start to put things in place. So we The U.S can get out of there once and for all knowing that we did make a change.
Bryan White

Anonymous said...

It would be good to see Iraqi's get their own oil fields up and running, so they could begin to make some money to help the country get back on it's feet so to speak. I think our relationship with them would improve if they owned and operated their own fields.

However, I think that Multi-National Companies owning the Iraqi oil fields would do a lot to hurt our relationship with Iraq. Most Iraqi's (and I am guessing here) would resent not owning a natural resource of theirs, and that said resource being owned by foreigners. No matter who owns it, the US will receive the brunt of hatred because we consume the most oil in the world, so they (the Iraqis) would assume that we pushed for their oil to be taken over so we could exploit them for a fast buck.

~Benjamin Pierce, International Relations

Anonymous said...

According to this article it sounds like a delicate way of saying the oil industry has noticed that, persistently little problem of peak oil and this makes them to see iraq as thier last chance to grab a few more years of prosperity.i think because the security that is improving this essentially allowed oil companies to move in quickly in iraq.This idea of iraq oil deal gets everybody's attentionwhich the truth is any oil deal has no standing as far as the government of iraq is concerned.All the contracts has to be approved by the federal authority before they are legal.the idea of AL-Shahristani clearly indicates that he has bigger ambitious program to reach 6 million barrel-per-day goal in the next six to seven years.That idea is very great and sounds good and will take off the crisis of oil in the entire world.This also will help the an increase of income to the government which will help them to do infrastructure on thier own country.Now my opinion is the iraq's will give a chance to U.S companies the oportunity because they also need trade for them to became stablised.iraq's we need each other so let us work together and make improvement.
omar farah, international relations.

Max said...

Democracy plus oil does not equal prosperity. Nigeria anyone? As for which companies are chosen to exploit Iraq's oil reserves, why does it matter? We just better hope it happens. It doesn't matter if US comapnies or French companies or Russian companies develope the oil fields. Say Exxon-Mobile gets all the contracts. Last I looked they were a proft maixmizing private firm. They will sell their oil to the highest bidder in a highly fungible global market. So unless the US wants to natioanlize their oil companies, it doesn't matter if they get the Iraqi contracts outside of perhaps generating some more tax dollars for the US treasury. What is critical is that the reserves in Iraq are developed. Even if we get on the green highway starting now, it will take years before the world reduces its need for conventional oil. When global growth stabilizes and resumes, even at lower levels, the price of oil will start to rise again and dampen economic recovery.