Iraqi Oil Contract Bidding: BBC vs. NPR Reporting

~~By InsightAnalytical-GRL

Here’s a little nugget for you regarding the bidding on Iraqi oil fields…the ones that the U.S. was supposed to clean up on after the “liberation” of Iraq.

It’s also a tale of the miserable news reporting we have here, including the “superior” NPR Radio.

I woke up and listened to the BBC World Service yesterday as usual and heard a brief report about bidding for Iraqi oil contracts.  The report included the facts that bidders weren’t exactly running to invest in Iraq.

From the BBC:

Oil companies reject Iraq’s terms

Only one of the bidders for the eight contracts to run oil and gas fields in Iraq has accepted oil ministry terms.

Six oil fields and two gas fields were available in a televised auction that was the first big oil tender in Iraq since the invasion of 2003.

BP and China’s CNPC agreed to run the 17 billion barrel Rumaila field after Exxon Mobil turned it down.

Iraq has asked the rest of the companies to consider resubmitting bids for the other seven contracts.

The oil ministry is offering 20-year service contracts.

Other fields have failed to find buyers, either because there were no bidders or because terms were declined.

Thirty-two oil companies had been approved as potential bidders.

MORE

The terms, of course, are detailed in the story, but suffice to say that the amount of payment is one of the key issues.  Another twist is that these are not “production-sharing” deals, but “service contracts” being offered because the Iraqi parliament hasn’t passed an oil bill yet and this sort of contract makes it easier to start the process at this point.  Under service contracts, a fixed fee will be paid for oil produced instead of having a proportion of the oil awarded to a company under a production-sharing contract.

So, things aren’t proceeding that quickly on the oil production front.

However, I caught a report on NPR which didn’t provide that information. Instead, the report simply mentioned that Iraqi oil bidding had started.

If you look at the story on the NPR site, you’ll see a fuller report, with the emphasis on being a lot more “touchy-feely.”

Foreign Companies Bid On Iraqi Oil Licenses

Morning Edition, June 30, 2009 · Foreign companies could soon be pumping Iraqi oil for the first time in nearly 40 years.

On Tuesday, the government of Iraq opened bids from oil companies interested in helping the country realize its oil production potential.

The oil companies are so eager for a crack at Iraq’s vast oil wealth that they are willing to overlook some big negatives: It’s a country still at war. There’s a lot of political opposition to foreign oil companies. There’s no guarantee the contracts awarded at this auction will even be honored. And yet, more than 30 companies submitted bids.

Big Oil has not had an opportunity like this for decades.

A bit later in the story, we do get some reality:

When Saddam Hussein kicked the foreign oil companies out of Iraq in 1972, many Iraqis supported the move, and there is still strong opposition to any sharing of the country’s oil wealth with foreign companies. The withdrawal of U.S. combat troops from Iraqi cities and towns this week has only reinforced Iraqi nationalism. In the coming weeks or months, Iraqi parliamentarians may even move to overturn oil contracts awarded through Tuesday’s auction.

But there’s hope:

The opening round produced only one deal. The Iraqi offers generally fell short of the oil company bids, and additional bargaining seemed likely.

Such deals won’t necessarily be highly profitable for the oil companies. In the next phase of the competition, however, the Iraqi government is expected to open fields that have not yet been explored or developed. The companies that win the right to search for oil might then be able to take a share of what they find. It’s that competition — not this one — that would mean big money for the companies.

“This is just everybody kind of wanting to get their foot in the door for the bigger prizes that will be here in a year or two,” says Stratfor’s Zeihan. No one wants to be left out.

“What makes Iraq special,” says Diwan, “is [that] there is room for all the big oil companies at the same time, and for all them to have sizable projects. Everybody will get something fairly large.”

All this may be very true, but if you only caught the brief headline story that I heard on the radio later in the day, you wouldn’t have a clue about the first day of bidding.

The question is, of course, why a news brief on the BBC can include fact that there was a difficult first day of bidding, while the NPR brief omits this information.

That’s a silly question, of course, because we all know that Americans are not allowed to get news, just spin and and obsfucation.

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9 Responses

  1. “News radio” here didn’t mention any of it.
    Where do you listen to BBC radio?
    I think I’ll have to rethink how I get my morning news.

    • Definitely do – you won’t hear any real news from American sources!

    • Leslie, I have a shortwave radio and pick up BBC World Service which is aimed at Africa since the BBC stopped broadcasting to the U.S! I also tune into Radio Australia during the same time in the morning…

      BBC News/World Service and Radio Australia are both streaming on the internet if you can listen there…

      • thanks, IA.
        I went to the BBC site late last night and found the player. Right now, Obama is speaking and I feel as if I could have just turned on the station here at home. I’ll just keep on listening and see what I hear.
        I’ll look for Radio Australia as well.

      • Check out the International Library tab at the top of this page and you’ll lots of foreign new sources!!!!

        Also, remember that the BBC (domestic UK) is different from the BBC World Service which has the focus you might want….There’s a link for the BBC WS at the BBC page…

  2. IA ~
    Thanks, I thought of looking at the tab right after I left that message last night, Your site (and you, of course) offer the best info.

    BTW: The “leave a comment link on Grail’s post above is not working.

    • Thanks, I just got the computer on and it’s 8pm! It’s infuriating, because when I originally set the post up, I know I checked the box. Then, after some revisions and such, I just published it without double-checking….this is not the first time weird things have happened with WordPress…They must have done some upgrading because I noticed yesterday that there were things added in the left sidebar and I had to edit them out…this was the same time I was working on GG’s post.

      I have a feeling the gremlins were at work…

  3. leslie already pointed it out, but I think the box wasn’t ticked for Grail Guardian’s post.

    The BBC can present a tailored view of events, if it suits their ends. Though, I must say that I think the U.S. press is bad as a whole. Because there is a wider variety of print media in the UK, the BBC is kept a little closer to honest.

    • The BBC has gone downhill since the huge budget cuts inflicted on it by Tony Blair after the David Kelly affair (the “suicided” guy who was being critical of the Iraq situation….the BBC was crucified over that. (Lots of people think Kelly was murdered because of his dissent.)

      As a result, they have been using a lot of documentaries produced for TV by outside producers. So, in the AM, after the news programming, you get the soundtrack of these documentaries that really are hard to listen to. At that point I switch to Radio Australia which is SUPERIOR to the BBC World Service. RA is actually mostly programming from ABC radio airing in Australia (Australian Broadcasting Corp.). There I hear long-form, in depth interviews and programs about the Asia-Pacific region and interesting science…Weekends are a bit tough as it’s a country western music show that airs there in the wee hours, but here in NM it’s 6 or 7 AM!!

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