Iraq Opens Oil Fields to the West, Libs Shout Together, “See. I Told You So.”

Never one to want to see the free market in action, liberals everywhere sat in dismay when Iraq opened its oil fields up to outside developers.

The move to invite bids for the development of Iraq’s largest producing fields should mark the return of the oil majors whose cash and expertise Iraq needs to restore its oil infrastructure that has been hard hit by sanctions and war.

But any awards to U.S. and British firms could anger opponents of the invasion, who have said the 2003 war was designed to give Western oil companies control over Iraqi oil reserves. U.S. and British officials have denied the charges.

By allowing international firms to help raise output at its key producing oil fields, the Iraqi government is breaking with the policy of major oil-producing neighbors such as Saudi Arabia, Kuwait and the United Arab Emirates where national firms keep tight control of foreign investment in their oil sectors.

“The six oilfields that have been announced today are the backbone of Iraq’s oil production,” Oil Minister Hussain al-Shahristani told a news conference.

“With its massive proven reserves, Iraq should not stay at its current level of production. Iraq should be the second or third largest oil-producing country.”

I really don’t understand how this is a bad thing, unless you are really so anti-free market that you think Iraq’s oil should be controlled by the government, i.e. nationalized, like Saudi Arabia and Venezuela.

Also, the oil isn’t just open to Western oil companies:

The Oil Ministry said they were open for long-term development contracts. Iraq has prequalified 41 foreign firms.

Oil Minister Hussain al-Shahristani said he hoped contracts could be signed in June 2009 to raise output by a combined 1.5 million barrels per day at those fields. He added Iraq aimed to raise output to 4.5 million bpd by 2013 from the current 2.5 million bpd.

He said any firm that wanted to bid must open an office in Baghdad. Few foreign companies have any presence in Iraq because of the security situation.

They are desperate for some help here.

Shahristani, showing frustration, said talks on deals that were supposed to quickly boost output at fields by utilizing the technical expertise of majors were still going on.

He said the firms were reluctant to sign the technical support contracts because they would offer their advice from abroad and preferred to be hands on with the fields.

“We are losing time,” Shahristani added.

Taken together, the short-term and long-term contracts should open the door to major foreign involvement in the OPEC member’s oil sector for the first time in nearly four decades.

Personally, I welcome another 2 million barrels of oil per day from Iraq, regardless of who puts it on the market. But I would prefer that it was not controlled by the government.