BAGHDAD — Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq,as Saddam Hussein rose to power. 36 years after losing their oil concession to nationalization.
Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.
The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.
The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production. . .
Sensitive to the appearance that they were profiting from the war and already under pressure because of record high oil prices, senior officials of two of the companies, speaking only on the condition that they not be identified, said they were helping Iraq rebuild its decrepit oil industry.
Emphasis added. And what was the Iraq Petroleum Company?
The Iraq Petroleum Company (IPC), until 1929 called Turkish Petroleum Company(TPC), was an oil company jointly owned by some of the world's largest oil companies, which had virtual monopoly on all oil exploration in Iraq from 1925 to 1961.
TPC obtained a concession to explore for oil in 1925, in return for a promise that the Iraqi government would receive a royalty for every ton of oil extracted, but linked to the oil companies' profits and not payable for the first 20 years. Drilling started immediately, and on October 15, 1927 oil was discovered at Baba Gurgur just north of Kirkuk. Many tons of oil were spilled before the gushing well was brought under control, and this sign of a large, valuable field soon proved to be true.
The discovery hastened the negotiations over the composition of TPC, and in July 1928 the shareholders signed a formal agreement: the Anglo-Persian Oil Company (which in 1935 became the Anglo-Iranian Oil Company (AIOC) and in 1954 BP), Royal Dutch/Shell, the Compagnie française des pétroles (CFP, which in 1991 became Total), and the Near East Development Corporation (a consortium of five large US oil companies, among them Standard Oil)each received 23.7% of the shares, and Calouste Gulbenkian the remaining 5%. TPC was to be organized as a nonprofit company, registered in Britain, that produced crude oil for a fee for its parent companies, based on their shares. The company was only allowed to refine and sell to Iraq's internal market, in order to prevent any competition with the parent companies.
The big loser was Iraq. The San Remo conference had stipulated that Iraqis should be allowed 20% of the company if they wanted to invest in it, but the oil companies successfully resisted Iraqi efforts to participate, despite pressure by the British government to accept Iraqi shareholders. In 1929 the TPC was renamed the Iraq Petroleum Company(IPC). . .
During the 1940s and 1950s, the company also obtained concessions to explore for oil in Dubai and other Gulf states. It retained its monopoly of exploration and development in Iraq until 1961, when the revolutionary government of General Qassem nationalized 99.5% of its concession areas in Iraq, leaving only the producing oilfields in the company's control. In 1971, the Iraqi government nationalized the remaining interests into the Iraq National Oil Company. This resulted in major increases in revenues for the Baath party government under Saddam Hussein to pursue massive infrastructure projects.
Emphasis added. And there you have it. It took 36 years but Big Oil is back to "help Iraq rebuild its decrepit oil industry." And if you believe that, there's a nice patch of dry land right next to the Mississippi I'd like to sell you.

