Next Iraq govt likely to alter oil deals

Next Iraq govt likely to alter oil deals

Released : Monday, October 19, 2009 12:01 AM

BAGHDAD: International oil companies signing deals with the Iraqi government are taking a big risk as the next government, to be elected in January, may revise or cancel those contracts, a senior lawmaker said on Monday.

"Oil companies, which expect to invest billions, should take into consideration the big risk behind these contracts. The new government will at a minimum alter the contract terms and that will not make the oil firms happy," Ali Hussain Balou, head of parliament s oil and gas committee, told Reuters.

"There are no guarantees for the oil companies that the new government will follow the same path in dealing with them. These contracts might be cancelled or at the very least revised," said Balou, a Kurdish lawmaker and sharp critic of Iraq s oil policy.

http://calibre.mworld.com/m/m.w?lp=GetStory&id=387947161

Here is another article on the same topic. This should give everybody a warm and fuzzy feeling about signing contracts with Iraq. Wonder what this will do to the big investment seminar this week in Washington?

UPDATE 2-Iraq lawmakers warn next govt may alter oil deals
Mon Oct 19, 2009 9:09am EDT

* Companies taking on big risks as election looms

* Not much investment expected until after poll

BAGHDAD, Oct 19 (Reuters) - International oil companies signing deals with Iraq are taking a big risk as the next government, to be elected in January, may revise or cancel those contracts, senior lawmakers said on Monday.

The warnings from lawmakers and uncertainty about who will win the Jan. 16 election mean that firms striking a spree of deals, which could rock the balance of power among oil states, are unlikely to invest heavily before the vote, analysts said.

"Oil companies, which expect to invest billions, should take into consideration the big risk behind these contracts," said Ali Hussain Balou, head of parliament's oil and gas committee.
"There are no guarantees for the oil companies that the new government will follow the same path in dealing with them. These contracts might be cancelled or at the very least revised," said Balou, a Kurdish lawmaker and sharp critic of Iraq's oil policy.

Iraq's cabinet last week approved a deal for BP (BP.L) and China's CNPC to develop the nation's biggest oilfield, Rumaila -- the first contract to emerge from a landmark auction in June and Iraq's first major oil deal since the 2003 U.S. invasion.

The auction and a second round in December are aimed at more than tripling Iraq's current output of 2.5 million barrels per day as it desperately seeks the billions of dollars it needs to rebuild from decades of war and sanctions.

The BP deal was the only successful one in the first round of tenders in June. But other agreements are near to being clinched with ENI (ENI.MI), Exxon Mobil (XOM.N) and others after Iraq's oil ministry sweetened its terms.