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.

“Harry T. and the Chamber of Secrets” co-starring Oil and Republicans–Screenplay by Bill Richardson [Subtitle: The Behind-the-Scenes Adventures of Bill R., Harry Teague and the NM CD-02 Democratic Primary]

4/30/08 UPDATE:

Teague has loaned his campaign an additional $475,000 over the past week, according to today’s Las Cruces Sun-News.

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I got a campaign flyer from folksy-looking Harry Teague few days ago, the first to come as primary day on June 3 approaches. Teague, the subject of one of my earlier posts, is Bill Richardson’s pick for the CD-2 House seat being vacated by GOP Rep. Steve Pearce. (see earlier posts on Teague and the mowing down of our progressive hope here , here , and here.)

Howard Dean’s Democracy for America which is billed as “our nation’s largest progressive political action community” proudly proclaims Teague’s “DFA Values”:

Harry supports progressive issues like a woman’s right to choose and bringing the troops home from Iraq. As a business owner, who has to make payroll for 250 employees he understands how to make a budget, stick with it, and not waste money.

Of course, DFA omits some interesting facts…read on.

Teague was elected in 1998 as a Lea County Commissioner and served for 8 years According to Teagues campaign website:

Though the commission was controlled by Republicans, they voted him chairman for three and a half years.

That’s because in many ways, Teague acts like a Republican.

First there are his ties to Steve Pearce, the 3-term House rep. from CD-2 who is now running against Heather Wilson for Pete Domenici’s Senate seat. Like Pearce, Teague has been involved in owning a business related to oil-drilling.

Teague had long been a supporter of Pearce – giving $1,000 to Pearce’s campaign in 2004 and $2,100 in 2006 – but said the congressman’s recent votes against funding to combat meth changed that. Teague said the two had been friends for some time. Pearce was two grades ahead of Teague in grade school, and Pearce’s family is close to the family of Teague’s wife.

According to the website Beyond DeLay, Pearce (along with Domenici and Wilson) is ranked among the top 22 most corrupt members of Congress. Pearce failed to disclose the sale of his oil drilling company in 2003 to Key Energy, which violated the Ethics in Government Act.

On top of this, Pearce has been the recipient of large amounts of money from Yates Petroleum, which is the largest leaseholder in the Otera Mesa. Prior to 2000, the Bureau of Land Management held the position that only small amounts of oil and gas lay under this grassland area and was against drilling, which also holds a huge underground water resevoir. Steve Pearce has always been an advocate of drilling there. Once the Bush Administration came in, the BLM reversed its position.

The BLM turnaround coincided with the largest lease holder in the Otero Mesa, Yates Petroleum, donating over $230,000 to the GOP over the last three election cycles.

Yates Petroleum also has been the single largest donor to Rep. Pearce’s campaign committees since 2002 with $32,490 in donations. Individually, members of the Yates family have contributed $78,379.99 to Rep. Pearce since he first ran for office in 2002.

If Rep. Pearce advocated opening up Otero Mesa to drilling in exchange for campaign contributions, he may have violated the bribery statute or accepted illegal gratuities.

Teague has bankrolled his run with a $200,000 loan to his campaign. But according to Democracy for New Mexico a good chunk of the rest of Teague’s war chest which comes from outside sources–an additional $208,000–comes from Republicans.

• the average donation was $1,300 per individual
• Teague is backed by the same people who have donated to Pearce
  • 28 (or 18%) of Teague donors have given a total of $94,635 to Pearce
  • $45,250 (or 22%) of Teague’s contributions came from Pearce donors
• Teague gets his money from those who give to Republicans:
  • 34 of his donors (or 22%) have given a total of $143,385 to Republicans
  • $51,800 of Teague’s contributions (or 26%) came from Republican donors
• Teague gets his money from the oil industry:
  • 61 of his donors (or 39%) are linked to the oil industry
  • $103,470 (or 51%) of his contributions are from people linked to the oil industry
• Teague’s money comes almost entirely from Lea County:
  • 135 (or 87%) of his donors were from Lea County
  • $172,110 (or 85%) of his contributions were from Lea County
  • Just 5 (or 3%) of Teague’s contributors were from the district outside of Lea County

As Democracy for New Mexico states, Teague entered the race with

the backing of wealthy friends in Lea County, many of them former supporters of Steve Pearce and the Republican Party. Teague is running as a Democrat, but shares many of the conservative views of politicos on the other side of the aisle. It shows in who’s donating funds to his campaign.

Teague is also is on the board of directors for the New Mexico Oil and Gas Association — which, Politico.com reports, may give him additional strong fundraising connections.

Teague also boasts about his efforts to bring a nuclear waste facilty to Lea County. Back in 2004, and a NRC (National Regulatory Commission) meeting called to gather comments on behalf of Louisiana Energy Services (LES). Les LES is a partnership of major nuclear energy companies. According to ADVFN News, Partners include Urenco, Westinghouse and U.S. energy companies Duke Power, Entergy and Exelon. (Editor’s Note: Hillary Clinton’s former chief strategist, Mark Penn and his consulting firm Burson Marsteller, worked to help renew an nuclear energy icense for Exelon in NJ. But candidate Barack Obama took money directly from Exelon and rewrote a Senate nuclear safety bill to reflect changes demanded by Republicans (NY Times, February 3, 2008).

Teague brushed off opposition to the LES project:

Some Lea County residents were openly displeased with opposition to the facility. Teague said, “Those of you that are opposed to this, and you’re not from Lea County, go away and leave us alone, please.”

Some of Teague’s connections are also under scrutiny.

Former Doña Ana County Commissioner Gilbert Apodaca is actively helping Teague in the Las Cruces area. Apodaca isn’t working for the campaign, but has been brought on board as a volunteer, though he’s been given no specific duties.

Some Democrats will find Teague’s acceptance of Apodaca’s help controversial. During his tenure on the commission, Apodaca was twice accused of bribery but never charged by the FBI. He had a reputation for ruling with an iron fist and a special audit found numerous problems with the operations of county government during his tenure.

Many Democrats in the county have openly expressed their dislike for Apodaca. When the governor appointed Apodaca to the state border authority in 2004, Democratic legislators from Doña Ana County protested during a meeting with the governor. Days later, Apodaca declined the appointment.

Teague claims he didn’t know about this controversy, even though he knew Apodaca through the state association of counties during the time they were both in office.

More recently, the Albuquerque Tribune reported on February 12, 2008 that Teague is involved in a federal lawsuit in which he is accused of ignoring a sexual harassment complaint by a former employee.

Harry Teague, a leading Democratic contender for the U.S. House seat representing southern New Mexico, has been accused in a federal civil rights lawsuit of ignoring a sexual harassment complaint leveled against a top manager in one of Teague’s companies in Hobbs.

Carolina Cueto, a former secretary for ABC Rental Co., charges in the lawsuit that she was harassed at work by James Chenault, operations manager for ABC Rental and Teaco Energy Services, both owned by Teague.

Chenault is one of 11 Teaco or ABC Rental employees who have contributed the maximum $2,300 to Teague’s congressional campaign, according to federal campaign finance records.

Teague has issued a statement expressing confidence that the law suit would come to nothing because he had nothing to do with the complaint described in the suit. But there are reports that the woman involved complained in sent e-mails to Teague, which were ignored.

But attorney Joseph Zebas said Cueto sent e-mails to Teague complaining about Chenault and that Teague never responded. Zebas said Cueto also complained to Troy Teague, the candidate’s son and ABC Rental president.

So, how close are Harry Teague and Bill Richardson?

The Albuquerque Journal on April 21, 2008 detailing Richardson’s campaign debts, Richardson’s travel debts were reported to be over $226,000.

The campaign’s debts for travel included $26,362 owed to the Branch law firm in Albuquerque and $203,850 owed to Lea King LLC. Richardson used private aircraft for travel during the campaign, including one owned by the law firm affiliated with Turner Branch of Albuquerque. Lea King was organized by Hobbs businessmen Johnny Cope and Harry Teague, according to state corporation records. The corporation is the registered owner of two Cessna jet planes, according to Federal Aviation Administration records.

Of course, Richardson has many other interesting ties in the energy industry (which contributed to his being appointed Secretary of Energy in 1998).

When he ran for governor of NM in 2002 Sourcewatch.org reports that

“Democratic gubernatorial candidate Bill Richardson resigned from the following boards on July 5, [2002]. He said he left his positions on the corporate boards so he can have more time to campaign.” Richardson resigned from the boards of: American Energy Group Inc.; Energy Investors Fund Group; Diamond Offshore Company: Peregrine Systems; City National Bank; Valero Corp. Services Corp.; Venoco; Hispanic Radio Network; Intellibridge Expert Network; and TerraSolar.

Richardson was also required by New Mexico state law to make full financial disclosure on sources of income. His employer was listed as Kissinger McLarty Associates .

(Peregrine Systems, you may recall, even woke then Attorney General John Ashcroft up in September 2002.

“The indictment charges these defendants with a massive conspiracy that had at its core one corrupt goal: to hit the numbers quarter after quarter, no matter what,” said Attorney General John Ashcroft. “The betrayal of the public trust alleged in this indictment extended from the Chief Executive Officer who headed the scheme to the independent auditor who knowingly certified the company�s false financial statements and allegedly made the continuing fraud possible.” [Executive and Auditor of Peregrine Systems, Inc. Indicted on Securities Fraud Charges, Former Director of Alliances Pleads Guilty, Department of Justice])

Although Richardson left the boards of Valero and Diamond Offshore, he retained large stock holdings in these companies. He finally sold the stocks in 2007 during while running for President because “he was ‘getting questions’ about the propriety of these holdings, especially given his past as energy secretary, and that it had become a “distraction”. (Wikipedia cites two news stories, one from TheStreet.com and one from the AP, which are no longer available on the web.)

Valero Energy is an especially interesting part of Richardson’s past. According to the University of Massachussetts’ Political Economy Research Institute, Valero ranks number 17 in PERI’s TOXIC 100: The Top Corporate Air Polluters in the U.S. index. The company has also been sued over groundwater contamination.

Richardson continued to hold stock in Valero even as the company was an early recipient of contracts for Iraqi oil (by 2003) and was also subpoenaed in connection with the Iraq Food for Oil scandal in 2004.

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So here we have all the threads connecting Richardson to Harry Teague and Teague to Steve Pearce.

And yet, Howard Dean’s “progressive DFA” sings the praises of Teague in NM CD-02.

Is there any question that something is very rotten in the Democratic Party? Or is there even a Democratic Party anymore?