Chevron seeks deal in Basra oil fields

Well, it looks like a US oil major is going to be back in Iraq for the first time since the 1972 nationalization. Maybe if Ahmed Chalabi had taken power, Chevron wouldn’t have to share with the French Total. But (as we predicted) the Russian Lukoil’s Saddam-era contacts are not being honored. From AP, April 12:

Chevron, Total Seek Oil Deal in Iraq
BAGHDAD — Oil giants Chevron Corp. and Total have confirmed that they are in discussions with the Iraqi Oil Ministry to increase production in an important oil field in southern Iraq.

The discussions are aimed at finalizing a two-year deal, or technical support agreement, to boost production at the West Qurna Stage 1 oil field near Iraq’s second-largest city of Basra.

Chevron and Total confirmed their involvement in the discussions in e-mails received Saturday by The Associated Press.

“Chevron is interested in helping the Iraq government’s objectives to develop its oil and gas industry,” Chevron spokesman Kurt Glaubitz said in an e-mail. Total spokeswoman Lisa Wyler confirmed the French company’s involvement.

Basra, about 340 miles southeast of Baghdad, has been the scene of sporadic attacks and clashes since the U.S.-led invasion in 2003. The latest fighting broke out March 25 when the government launched an operation against Shiite militants, who remain in control of several neighborhoods.

West Qurna field, located about 40 miles west of Basra, is among Iraq’s 10 “super giant” fields with its reserves estimated between 15 to 21 billion barrels, according to Iraqi Oil Ministry and Energy Information Administration.

The Ministry intends to add 100,000 barrels per day to the field’s current capacity of 180,000 bpd. Its estimated pre-2003 production capacity stood at 250,000 bpd, the ministry’s figures show.

In 1997, the Russian Lukoil oil giant struck a $3.7 billion deal with former Iraqi leader Saddam Hussein to drill at the West Qurna field. However, Saddam canceled the contract in 2002. The Russians hoped they would be able to revive it when Moscow wrote off most of Iraq’s $12.9 billion debt.

The Iraqi Oil Ministry has said it is also negotiating with Royal Dutch Shell PLC, BP PLC, ExxonMobil Corp. to increase crude production in four other fields and under the same agreement.

Iraq has the world’s third-largest oil reserves, totaling more than 115 billion barrels. Iraq’s average production for February was 2.4 million barrels per day and exports averaged 1.93 million barrels per day.

This also has much to say about why Nouri al-Maliki “called on US forces” to pacify Basra (as if he really had any choice in the matter), rather than the ineffectual British, in whose occupation zone the province lies—and who are now accused of appeasing the Sadr militia. US air-strikes continue in the city, even as the Sadrists are in (tentative) retreat. (London Times, April 12)

See our last posts on Iraq, and Basra and the struggle for the oil.

  1. McCain scenarios us rosily
    Meanwhile, John McCain (who recently proved himself a total ignoramus on the basics of Middle East politics) paints a utopian picture of US aims in Iraq. From the Baltimore Sun, April 7:

    McCain: Iraq Success Within Reach
    Saying “we are no longer staring into the abyss of defeat,” Sen. John McCain speaks to the Veterans of Foreign Wars in Kansas City this morning, laying out his vision of the situation in Iraq just one day before General David Petraeus testifies before Congress.

    McCain will tell his audience that the U.S. “can now look ahead to the genuine prospect of success” in Iraq. And he defines it this way:

    *The establishment of a generally peaceful, stable, prosperous, democratic state that poses no threat to its neighbors and contributes to the defeat of terrorists.

    *The advance of religious tolerance over violent radicalism.

    *A level of security that allows the Iraqi authorities to govern, the average person to live a normal life, and international entities to operate. It is a situation in which the rule of law, after decades of tyranny, takes hold.

    *And it is an Iraq where Iraqi forces have the responsibility for enforcing security in their country, and where American troops can return home, with the honor of having secured their country’s interests at great personal cost, and helping another people achieve peace and self-determination.

    Those goals, McCain will say, “are within reach.”

    McCain, who just returned from a visit to Iraq, takes on both the Democratic candidates for president who are advocating for withdrawing troops calling their plans “the height of irresponsibility.”

    Isn’t that cute? The pro-war forces prattle on about “democracy,” while the anti-war forces increasingly chase Jewish conspiracies. And Chevron laughs all the way to the bank.