Opinions vary in what regards the Iraqi oil field development contracts, which will increase Iraq's production capacity to around 10 million barrels per day by 2020, compared to the present rate of about 2.5 million barrels per day. On their personal blogs, a number of Iraqi economists both in Iraq and abroad raised the issue of the effects of an ensuing quick and high rise in revenues on the country's economy, in particular in light of the rampant corruption, the absence of planning and the collapse of state institutions. Also, some of the members of the Iraqi parliament and experts criticized the contracts which they deemed to be illegal, while some others filed motions against the Ministry of Oil. As for the international media, their focus was on the absence of the U.S companies [from the deals], which is in contrast with what was expected, considering the view that one of the main reasons behind the invasion was to secure American control over the Iraqi oil. Hence, the Iraqi economists wondered: Why rely on foreign companies in the development of the fields that have been discovered? They also wondered about the risks involved in not leaving any giant oil fields for the national oil companies to operate in the future. On the other hand, some claimed that with the devastation that afflicted the country in the past three decades, and with the mass exodus of its experts, Iraq is now lacking in the national skilled cadres and effective institutions to increase its production capacity on its own. A rather financial question, here, thus arises: what will be the fate of the 200 billion dollars generated by Iraq annually, at the current oil prices, through its new oil exports compared to the 70-80 billion dollars incurred at present? How will such additional funds be able to salvage the situation, rather than exacerbate it, by for instance increasing corruption for the benefit of the ruling class, instead of serving the interests of the people? The answer for this was: Is it an imperative that Iraq remains under its present conditions without any development, and wait until corruption ends? Is Iraq the only oil producing country where corruption is widespread? Must Iraq wait until corruption ends, so that it can begin increasing its production capacity? Is it not more efficient to start now, especially as the additional development of these fields will surely take a long period of time? In any case, the Ministry of Oil was accused by some MPs and experts abroad of breaching the due legal process, by intending to only obtain the cabinet's approval of the contracts, and not the parliament's. Moreover, a lawsuit was filed against the ministry. However, despite all these attempts, the Ministry of Oil intends to sign the contracts with the companies that won the bids in Baghdad, in the last week of this year, after the approval of the Council of Ministers. It is known that the contracts were awarded to this or that company in accordance with the public bidding system, which is similar to the one followed by Saudi Arabia in awarding the contracts for the exploration and development of its untapped gas fields, as well as the system that was followed in awarding the Libyan contracts recently. This system stipulates that the concerned ministry would put in place a set of economic and technical standards and criteria that it expects the bidding companies to adhere to, with the latter subsequently recording their bids in closed files and then submitting them publically. These envelopes are then opened in front of television cameras and the companies' delegates. The company whose bid satisfies the Ministry's specifications most is chosen next. This system is more transparent than the previous system where companies were chosen as a result of bilateral negotiations. As it has now become known, the Chinese companies secured the lion's share of these contracts, followed by Asian and then European companies. This is while American companies only won two contracts. It should be noted here that the Chinese companies have entered into partnership agreements with the Europeans in most of their bids, through various kinds of joint ventures. There are many reasons behind this broad Chinese involvement and behind the American failure in securing contracts, with the most important of these perhaps being the new geopolitical features in the world where China is now the second largest oil consumer, following the United States. As such, Beijing is determined to secure its requirements of oil and gas imports by means of its national companies, instead of relying on foreign companies, as part of its national security policy that is being adopted and supported with the proper funds. It is no coincidence, thus, that the Chinese Prime Minister Hu Jintao visited Kazakhstan and Turkmenistan during the same period that the Iraqi contracts were being awarded. The aim behind this visit to the Central Asian countries was to participate in the launching ceremony of the Kazakhstani portion of the pipeline that will supply the Central Asian gas to China with a capacity of 40 billion square meters of gas annually, and over a period of 30 years. These supplies were previously being exported to Russia. One of the disadvantages of the bidding system however, is that it allows for relatively small companies or companies that have only recently become involved on the global level, to participate in the tenders. While these companies may have less costs than giant corporations, they often ultimately fall behind in executing the contracts in accordance with the latter's terms and conditions, and in adhering to the specified schedules, and there is ample evidence for such instances. Also, some of these companies are willing to accept fewer profits in order to quickly expand on the international level. It is thus very possible that these factors mentioned above played an important role in securing the contracts for some of the companies, not to mention in preventing the U.S companies from having a favoured and exceptional relationship with the Ministry of Oil, given that these companies demand high profits, and have heavy expenditures to meet. *. Mr. Khadduri is an energy expert
