Royal Dutch Shell confirms in talks on Iraq oil production
8:16a ET June 20, 2008 (MarketWatch)
NEW YORK (MarketWatch) -- Royal Dutch Shell PLC on Friday confirmed it's in contract negotiations to boost Iraq's petroleum output, after reports that the western oil giants are close to resuming a major role in the war-torn country for the first time in 36 years.
The oil majors as well as a host of smaller companies are in talks with Iraq's oil ministry for unusual no-bid contracts to service the largest oil fields, the New York Times reported earlier this week, citing ministry officials, oil company officials and an American diplomat.
Beating out offers from 40 other companies in Russia, China and India, five companies -- Exxon Mobil Corp. , Chevron Corp. , Royal Dutch Shell , BP and Total SA -- are emerging as frontrunners as Iraq moves to modernize operations through which to tap its vast oil reserves.
The move could mark a rare foray into an oil rich-nation for the petroleum majors, dealt a series of setbacks as countries from Bolivia to Russia and Kazakhstan move to secure a larger share of their own oil wealth.
With oil prices teasing $140 a barrel and the majors struggling to replace their reserves, plenty of petrodollars at stake.
Sensitive to the appearance that they are profiting from the war, senior oil executives point out they are helping Iraq restore its infrastructure, which fell into disrepair under deposed dictator Saddam Hussein.
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