At an auction for oil contracts in June, presided over by the minister for oil Hussein Shahristani, multinational oil companies could not agree to the Iraqi government’s tough terms.
The ministry of oil was demanding double the fees per barrel that most of the oil operators were prepared to accept in order to win contracts. Only one deal was made by BP and China’s CNPC to turn the country’s Rumaila field into the world’s second largest.
Iraq holds oil reserves of about 115 billion barrels, which are relatively easy and inexpensive to tap. Only Saudi Arabia and Iran hold more oil and both are unattainable for Western oil operators.