Iraq to open up oil fields for first time in four decades

The deals, likely to be announced live on television on June 29 and 30, will provide the government with much-needed revenue as it struggles to rebuild the country after three wars and 20 years of debilitating economic sanctions.

Thirty-one companies have submitted bids to develop six giant oil fields and two gas fields. The oil deposits, holding known reserves of 43 billion barrels of crude, are in southern and northern Iraq while the gas concessions are west and northeast of Baghdad.

“Our principal objective is to increase our oil production from 2.4 million barrels per day to more than four million in the next five years,” Oil Minister Hussein al-Shahristani said in an interview with Iraqi public television.

Increasing production to that level will, according to him, pump an extra 1.7 trillion U.S. dollars into government coffers over the next 20 years.

Shahristani has said that only 30 billion U.S. dollars of that sum will go to the companies that have extracted the oil.

“This is a huge amount that would finance infrastructure projects across Iraq -- schools, roads, airports, housing, hospitals,” he said, insisting that the country would retain control over its oil reserves.

For energy firms, meanwhile, the appeal of the Iraqi contracts is the chance to plant a foot firmly in the country, the first time such an opportunity has been offered since Saddam nationalized the Iraq Petroleum Company in 1972.

“Thanks to sanctions and war, no company has wanted or been able to invest,” Ruba Husari, an energy expert and the founder of the website iraqoilforum.com, explained.

“Today, the country is stable, in both its security and its institutions.”

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