A smattering of small foreign firms have signed contracts to pump oil in the country, mostly in the semi-autonomous Kurdish region in the north. But until pipelines stop blowing up and a stable national government is in place, the big western firms like Exxon Mobil (Charts, Fortune 500), BP (Charts), Royal Dutch Shell (Charts) and Chevron (Charts, Fortune 500) – and the big money they could spend on exploration and infrastructure – will stay away.
“You would need a very stable, long-term legal environment” for the big western oil companies to invest the tens of billion of dollars needed to really ramp up production there, said Greg Priddy, a global energy analyst at the Eurasia group, a political risk consultancy. “Everyone sees this as a long-term opportunity, but they have to get the political situation sorted out first.”
Now we know why the Kurds get such an excellent press. As for opportunity, we need to ask, opportunity for who?
It would really be much cheaper to simply buy the oil from whichever Iraqi faction emerges as dominate. That and follow Al Gore’s advice to develop green energy.
