The Rising Influence of Rising Affluence

[old man]

Dew -- I have only a scant knowledge of these matters but I will offer a few comments fwiw knowing it may have been better to remain silent. I have the impression that Iraq is using a model similar to what S Arabia uses in that the govt pays oil cos like Exxon that make up S Aramco a negogiated fee for their services. I suspect that fee is so much per barrel plus expenses. These cos wouldn't benefit from any increase in oil prices -- that goes to the country.
There are different types of oil contracts. A fairly common one, Production Service (or Sharing) Contracts (PSCs) are used in Nigeria where the country receives royalties and taxes on a percentage basis, e.g., 5% royalty and 50% tax. If oil goes up both the country and the producing oil cos would benefit.
Getting back to Iraq, I suspect that the IOCs like BP would receive so much per barrel produced plus expenses. Apparently Iraq was offering a bonus to companies that would expand production beyond a certain level. Iraq thought $2 would be sufficent incentive and it looks as they were correct as BP et al accepted. Exxon offered $4.80 which isn't that much more than $2. If one thinks of it as a bonus in addition to whatever standard fee was going to be paid it may not be as bad as it appears. As the article implies Iraq has lots of oil and cos may have been willing to swallow hard to get a foothold in the country.
John