Iraq Sells Oil Fields
On the same day when US troops began pulling out of Iraqi cities, the government auctioned contracts to run eight giant oil and gas fields in the region. The biggest contract went to a BP-led consortium including Chinese CNPC. They will be in charge of the 17 billion barrel Rumalla field.
It is for the first time since 1972, when the oil reserves were nationalized, that a foreign company is accepted to run fields underneath which the world's third largest oil reserves lie. The companies which won the auction will be paid per barrel of oil produced above a certain amount.
Back in 2003, when the Iraq invasion began, all expected that following Saddam Hussein's removal from power, the oil tap will open and billions of gallons of Iraqi oil would flood the market. It is only now, some six years later, that such an event is getting close to becoming reality.
Prior to the auction, which was held in Baghdad's fortified Green Zone, oil prices rose towards $72 a barrel, a trend caused by a weaker dollar and in expectation of low crude oil stocks in U.S. inventory data.
Combined with the appearance of a milder economic crisis, oil prices in Asia are on track to post a near 50 percent increase in the second quarter, the highest since 1990. It remains to be seen how CNPC's involvement in Iraq will affect those prices.