WASHINGTON (AFP) — Secretary of State Condoleezza Rice said Thursday the US government was not involved in Iraq's no-bid oil contracts that could see four major western oil firms start their first commercial work there since the war began five years ago.
"The United States government has stayed out of the matter of awarding the Iraq oil contracts. It's a private sector matter," Rice said in an interview on Fox news network.
But she did stress that the likely awarding of contracts "demonstrates that it's starting to get interesting in Iraq and recognizes the potential for Iraq to become an even more major oil supplier."
Earlier this month Iraq's Oil Minister Hussein Shahristani was cited as saying his country intended to sign technical support agreements with foreign oil majors including ExxonMobil, BP, Shell and Total by the end of June that would help boost output capacity by 500,000 barrels per day.
Citing an improving security situation in the strife-ridden country, Rice said that "the Iraqis, even though they need to pass an oil law, are beginning to attract investment.
"That's really a good sign. It will be a good sign if Iraq can increase oil production because, of course, the supply and demand of oil is a major concern to all of us."
Since a US-led coalition invaded Iraq in 2003, suspicion has swirled particularly in the Arab world that Washington pursued a war footing with Iraq in order to gain access to the country's massive oil reserves.
US President George W. Bush has consistently stated that the war was necessary to combat terrorism.
On Thursday the New York Times reported that ExxonMobil, Shell, Total and BP -- the original foreign partners in the Iraq Petroleum Company (IPC) -- were in the final stages of negotiations on contracts that would see them return to Iraq 36 years after their oil concessions were lost due to the nationalization of IPC spearheaded by Saddam Hussein.
The firms' offers prevailed over those by more than 40 other companies including those from Russia, China and India, the Times reported.
The Iraqi Oil Ministry said the contracts were intended to bring modern skills and technology to its oil fields as the country finalized its oil law in parliament, the daily said.
The new no-bid, two-year contracts are relatively small by international standards but open the door to potentially lucrative work for the western firms as they put the companies at an advantage on future contracts, the paper said.
Middle East oil expert Leila Benali of Cambridge Energy Research Associates said the current contracts are a "foothold" in Iraq for firms eyeing long-term contracts.
"The bigger prize everybody is waiting for is development of the giant new fields," Benali was quoted as saying.
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