*cheers* Looks like Iraqi oil is going anywhere but the US

[Kev H]

This is very good for several reasons. Anyone see any downside to this?

http://money.cnn.com/2007/04/05/news/international/iraq_oil/index.htm

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NEW YORK (CNNMoney.com) -- Despite claims by some critics that the Bush administration invaded Iraq to take control of its oil, the first contracts with major oil firms from Iraq's new government are likely to go not to U.S. companies, but rather to companies from China, India, Vietnam, and Indonesia.

While Iraqi lawmakers struggle to pass an agreement on exactly who will award the contracts and how the revenue will be shared, experts say a draft version that passed the cabinet earlier this year will likely uphold agreements previously signed by those countries under Saddam Hussein's government.

"The Chinese could announce something within the next few months" if all goes well with the oil law, said James Placke, a senior associate at Cambridge Energy Research Associates who specializes in the Middle East...

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[3113]

Anyone see any downside to this?

I'm sorry, but I don't understand your point. This is just going to make Americans who supported the war in *hopes* of getting that Iraqi oil angry (I can still remember hearing one after another flag-waver saying, "Well make our money back on the oil....")...and if the government we put in power can't remain in power, if Iraq ends up with Iran, then we'll have a very rich, Islamic extremist theocracy to contend against, one with power over all that oil.

And no matter what, U.S. tax payers are going to be paying out the debt for this war for years to come. I see no upside for us.

 

[rgraham666]

I don't feel like cheering.

If the U.S. did invade Iraq for the oil, that means thousands of young men and women have given their lives for nothing. And over a hundred thousand more have suffered misery and hardship for nothing.

To say nothing of the suffering of the Iraqis.

However that was only a minor reason. The main reason was to show to the rest of the world that the U.S. was no longer subject to the law.

Which is a worse reason, in my mind, for those people to suffer and die.

 

[Stella_Omega]

My government betrayed me.

No upside.
Even if we "got the oil" there would be no upside.

 

[Disrupted]

If I did not know any better I would think the U.S. is well on its way to becoming fully stripped of any economic clout. Should job outsourcing be increasingly prevalent just for acquiring more money (or some semblance of power), what would the country have to offer (aside from workers and, if applicable, education) when others no longer have any dependence upon it (as far as materials and/or goods are concerned)?

What bothers me is how many seem to be focusing on the political garbage (between the two dominant parties) rather than the situation citizens are facing (not to mention the debt on that senseless war). I suppose their suffering could more or less be regarded as collateral damage just as the case appears to be (or is) with Iraqi civilians and even troops, dare I say it.

 

[Guest]

My government betrayed me.

No upside.
Even if we "got the oil" there would be no upside.

Yes.

No cheering here.

 

[Roxanne Appleby]

I'm not commenting on the politics, but the economics are off base. It doesn't matter where the oil actually goes physically, because there's just one world oil market. If this oil goes to China that means they don't buy some other oil from someplace else, which can go to the U.S., or Europe, or Timbuctoo, or wherever. More oil on the market = price lower. Less oil = price higher. Who pumps and who burns any particular barrel is irrelevent.

Bottom line: If you think this is a useful fact with which to make the political argument that you were already making, it's not. Go ahead and make the political arguments if you want, but if you use this to do it you've stepped into a credibility trap.

 

[gauchecritic]

I'm not commenting on the politics, but the economics are off base. It doesn't matter where the oil actually goes physically, because there's just one world oil market. If this oil goes to China that means they don't buy some other oil from someplace else, which can go to the U.S., or Europe, or Timbuctoo, or wherever. More oil on the market = price lower. Less oil = price higher. Who pumps and who burns any particular barrel is irrelevent.

Bottom line: If you think this is a useful fact with which to make the political argument that you were already making, it's not. Go ahead and make the political arguments if you want, but if you use this to do it you've stepped into a credibility trap.

"I'm not commenting on the politics." Tscha. Roxelby. Tsk tsk.

Anyway Timbuktu probably doesn't actually need all that much oil being a large crossroads for trade routes in the area.

Aside from which, as you so gracefully sprung your own trap, it doesn't matter who actually buys or uses the oil the US still profits from it. (in many more ways than actually getting it.) So the political arguement stands: The war was about oil. (with the US actually adapting (and twisting) a communist doctrine viz: controlling the means of production )

I see a Running Dog but it's pink.

So, just this once, let us wishy washy liberal babies have our bottle eh?

 

[Roxanne Appleby]

"I'm not commenting on the politics." Tscha. Roxelby. Tsk tsk.

Anyway Timbuktu probably doesn't actually need all that much oil being a large crossroads for trade routes in the area.

Aside from which, as you so gracefully sprung your own trap, it doesn't matter who actually buys or uses the oil the US still profits from it. (in many more ways than actually getting it.) So the political arguement stands: The war was about oil. (with the US actually adapting (and twisting) a communist doctrine viz: controlling the means of production )

I see a Running Dog but it's pink.

So, just this once, let us wishy washy liberal babies have our bottle eh?

I'm from the land of homo economicus and I'm here to help you . . .

No, really. If you go forth using a flawed economic argument to make a political argument, then you look like one of those party hacks who turns every possible unfortunate event into "evidence" that the other party is the devil. You know, "Deaths in nursing homes continued to exceed the general population average last year, more evidence of incompetence in the trapezoidal office . . ."

The U.S. "profits" from having that extra oil in the market no more and no less than any other consumer, on a per-barrel of consumption basis. You can say that we burn more barrels so we "profit" more, but that's a different argument than the one suggested by the OP, and as a political argument it's likely to leave U.S. citizens scratching their heads: "Tell me again why it's a bad thing that there's more oil going into the market instead of less?"

 

[gauchecritic]

and as a political argument it's likely to leave U.S. citizens scratching their heads: "Tell me again why it's a bad thing that there's more oil going into the market instead of less?"

Yeah but they have to come to that insight first. If they're capable of that insight then they're equally capable of reasoning about political (read economic) motives for an expensive war in the first place. So the OP wins both ways.

 

[Roxanne Appleby]

Yeah but they have to come to that insight first. If they're capable of that insight then they're equally capable of reasoning about political (read economic) motives for an expensive war in the first place. So the OP wins both ways.

Um, does it work that way?

Well, as long as you don't mind sacrificing your economic cred to win the political arguement -



Unrelated: BTW, am I wrong to take literally the part about "if you think this applies to you it does?" I don't mind, but I'm curious. Am I wrong to infer that the negative side of the characterization refers to certain geopolitcal views that are the subject of a current thread?

(If I'm not wrong, then my response is that Winnie probably got the same in the '30s. Not saying the cases are identical, but there are obvious anlalogies.)

 

[R. Richard]

The situation is quite a bit more complicated than indicated in the initial post.
======================================================
The Asian firms are getting the first Iraqi oil contracts for several reasons.

First, less constrained by Western sanctions during the Hussein regime, they've been operating in Iraq and know the country's oilfields.

However, the contracts under consideration are small.

A Chinese agreement is to produce about 70,000 barrels of oil a day, while a Vietnamese agreement is for about 60,000 barrels of oil a day. However, the barrel amount is tiny even by Iraq's depressed post-war production of around 2 million barrels a day. [The barrel amount is some 6.5% of current Iraq production capacity.

Iraq is thought to be able to ramp up production to over 3 million barrels a day with fairly little effort, providing the security situation improves. Omptimistic estimates have Iraq producing up to 6 million barrels a day in the long term, which would make Iraq the world's No. 4 producer behind Russia, Saudi Arabia and the United States.

The Asian firms are also well positioned to grab further contracts.

Having avoided military entanglements in the region, they may curry more favor with the Iraqi people. They have no involvement with the secular or ethnic people and current conditions favor them.

"Given its rapidly growing thirst for oil, combined with its feeling of isolation from world oil markets, China is sometimes viewed as more cavalier than Western oil firms when it comes to putting capital and people at risk. That could lead them to sign contracts in violent Iraq sooner than Western firms. The Chinese seem to be willing to go places where other companies can't find workers to go," said Adam Sieminski, chief energy economist at Deutsche Bank.

But none of this suggests Western firms like ExxonMobil, Chevron, BP and Royal Dutch Shell will be completely cut out of the action.

First, the technical prowess of the big oil companies is world renowned.

"We have not heard anything from any Iraqi ministers against U.S. oil companies," say industry sources. "In fact, we have heard the opposite. They are the best in field exploration and development. Iraq wants them."

Producing oil is more than just pumping crude out of the ground. Proper operation of an oil field is critical to recovering as much oil as practical. Some of the late stage strategies are quite complex and require the expertise of the major oil companies.

Second, Iraq's oil contract game has just begun.

According to a letter supplied by John S. Herold's Ruppel, memorandums of understanding have been signed with all the oil majors for several years. And Iraqi Oil Minister Hussein al-Shahristani has said the country plans to tender for major oil projects in the second half of 2007.

Steve Kretzmann, executive director of Oil Change International, an industry watchdog group, criticized the draft oil law for allowing long-term oil contracts to be awarded to foreign oil firms, a practice he said was unique in the Middle East.

"Giving out a few crumbs to the Chinese and Indians is one thing," said Kretzmann, who noted the draft law was seen by both the Bush administration and the International Monetary Fund before it was given to Iraq's parliament. "But the real prize are the contracts that award long-term rights. I think the [Western oil companies] are biding their time."

 

[Jenny_Jackson]

Sorry, Roxanne, but there is a political downside to this. I agree most of the short term fallout is economic, as you pointed out. However, in the minds of a unwashed, WE FUCKING PAID A HIGH PRICE FOR THAT OIL so it should be ours.

That argument is flawed, of course, but it is the mind-set. Even GWB knew this was going to blow up when he began to pointedly shift his rhetoric towards "Freedom" and "Independance" and any other non-paying term he could think of. It hasn't worked. Every time Walter Reed flashes across the TV screens of America, the thought is CHEAP OIL, especially now with the Big Oil companies gouging us as deep as they think they can get away with.

Adiose Republican Party. See you in 20 or 30 years, dudes.

 

[gauchecritic]

Um, does it work that way?

Well, as long as you don't mind sacrificing your economic cred to win the political arguement -

Ummm. No. What little economic credibility I have is certainly greater than any politician or opinionated hack will give me credit for anyway, because otherwise I would be able to form my own opinion and have no reason to read nor be influenced by editorialisation rather than reportage. Opeds don't rely to any great degree on their audience knowing anything other than what they're led to believe, much less care about.
Next you'll be telling me that economics has nothing to do with politics. Or that capitalist lackeys are fully aware that economics is a measuring stick and not a tool.

Unrelated: BTW, am I wrong to take literally the part about "if you think this applies to you it does?" I don't mind, but I'm curious. Am I wrong to infer that the negative side of the characterization refers to certain geopolitcal views that are the subject of a current thread?

(If I'm not wrong, then my response is that Winnie probably got the same in the '30s. Not saying the cases are identical, but there are obvious anlalogies.)

Naa, naa, naa, god bless you. It's merely a sturdy plank in the communist platform intended to impress those of a robust intellect that staunch capitalism is inherently wrong in its blatant disregard of the proletariat and seeing them not as a source of wealth but as a disposable means of production, as well as being wrong about everything else too.

Winnie? Yes, yes he was. Which is why he was only useful as a wartime prime minister.

Revanchist: From the old French Revancher; to revenge.
the policy of a state intent on regaining areas of its original territory that have been lost to other states as a result of war, a treaty signed under duress, etc.

quite apt. No?

 

[Liar]

This is very good for several reasons.

Oy, Kev. Since you said it, which ARE those reasons?

 

[cumallday]

The article says the first contracts will not go to the U.S.
How big are the contracts?
The article says, "The contracts under consideration are small."
And then the article concludes,
"Giving out a few crumbs to the Chinese and Indians is one thing," said Kretzmann, who noted the draft law was seen by both the Bush administration and the International Monetary Fund before it was given to Iraq's parliament. "But the real prize are the contracts that award long-term rights. I think the [Western oil companies] are biding their time."
Cheers!

 

[rgraham666]

Well the current Iraqi government will be in power for about one day after the U.S. pulls out.

Then all bets are off.