Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Join the forum, it's quick and easy

Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

Would you like to react to this message? Create an account in a few clicks or log in to continue.
Established in 2006 as a Community of Reality

Many Topics Including The Oldest Dinar Community. Copyright © 2006-2020


    "Oil Price": A mass exodus of international oil companies from Iraq... The stated reasons are not re

    Rocky
    Rocky
    Rocky
    Admin Assist
    Admin Assist


    Posts : 278526
    Join date : 2012-12-21
    • Post n°1

    "Oil Price": A mass exodus of international oil companies from Iraq... The stated reasons are not re Empty "Oil Price": A mass exodus of international oil companies from Iraq... The stated reasons are not re

    Post by Rocky Tue 22 Jun 2021, 2:25 pm

    [size=36][You must be registered and logged in to see this link.][/size]

    [You must be registered and logged in to see this link.]

    A report by the " Oil Price " website  , which specializes in global oil and energy news, shed light on what it described as a "mass exodus" of international oil companies from Iraq.

    In a recent report, seen by IQ News , the site investigated the  "real reasons" for leaving the American "ExxonMobil" companies, and then the British "BP", and before them the giant "Shell", to work in the Iraqi oil fields, saying that the official announced reasons For this withdrawal "is not real."
    Oil Price says that corruption is part of the reasons, but the “strongest factor” behind the announcement by the giant “BP” company, its intention to withdraw from Iraq, last week, despite owning 47.6 percent of the Rumaila field, is “China and Russia control over Almost everything is worth owning in the oil and gas sector in Iraq and working to gain strength over all the rest."
    The website indicates that the Chinese state oil company has a stake in the Rumaila oil field in Basra of 46.4 percent, while the Iraqi Oil Marketing Company "SOMO" owns only 6 percent, without knowing anything about the mechanism of the new division of the share, after the announcement of "BP" known as " the BP ", its intention to withdraw.
    And "Oil Price" quotes former Prime Minister Adel Abdul-Mahdi, who previously held the position of Minister of Oil for varying periods, that Iraq paid more than 14 billion dinars in cash compensation to international oil companies, from the beginning of 2011 until the end of 2014.
    The website indicates that there is a clause in the contracts that prevents the announcement of these compensations, saying that "the packages of dollars that Iraq paid in compensation can extend from the Earth to the moon by six times."
    The following is the text of the "Oil Price" report, as seen by  IQ News :
    (more than $14 billion) from the beginning of 2011 until the end of 2014 as cash "compensation" payments to international oil companies. To put this in kind of understandable perspective: If that amount were put into dollar bills from one end to the other, it would stretch from Earth to the Moon nearly six times as much.
    The news last week that British oil giant BP was working on a plan to split its operations in the giant Rumaila oil field in Iraq into a stand-alone company had a very familiar episode about this for those who had been in the oil markets work for a while. It was exceptionally reminiscent of the withdrawal of the giant Anglo-Dutch oil company, Royal Dutch Shell (Shell), from the giant Majnoon oil field in Iraq in 2017 and also its withdrawal from the giant West Qurna 1 oil field in Iraq in 2018.
    Each of these announcements also bears a striking resemblance to the recent announcement by the  US major ExxonMobil (Exxon ) that it also wanted to exit West Qurna 1 and withdraw from the Joint Seawater Supply Project ( CSSP ) in Iraq some time ago. Below are the answers to the reason for this mass exodus of Western companies from Iraq.
     The real answers have nothing to do with the official reasons given at the time for these companies' withdrawal from Iraq, as the already savvy readers of OilPrice.com might have interpreted  them. In the case of Shell, the official reason for its withdrawal from both Majnoon and West Qurna 1 was that these moves were in line with its comprehensive plan to restructure its global business, following its acquisition of BG Group  , which includes a $30 billion asset disposal program.
    The reason given by BP's various sources  for creating a completely independent entity operating in Iraq - 'fence' is another word for it - is that it would allow  BP more flexibility to invest in low-carbon energy by enabling it to reduce its spending on oil and gas. 
    ExxonMobil, for its part, has long since given up the trouble of giving any official reason for not wanting to do business with Iraq.
    Is the reason why so many international oil companies are leaving Iraq because of the rampant corruption that permeates any sector of Iraq where there is money, as OilPrice.com has consistently highlighted  ? This is partly because, with little change in the overall corrupt strata of business and political dealings in the country that has been marked by the highly respected independent international NGO, Transparency International ( TI ) in many of its Corruption Perceptions Index publications, in which Iraq appears Typically in the worst 10 out of 180 countries in terms of the scale and scope of corruption.
    Transparency International states that "massive embezzlement, procurement fraud, money laundering, oil smuggling and pervasive bureaucratic bribery have led the country to the bottom of international corruption ratings, fueled political violence and impeded effective state building and service delivery." The report concludes that "political interference in anti-corruption bodies, politicization of corruption issues, weak civil society, insecurity, lack of resources, and incomplete legal provisions severely limit the government's ability to efficiently curb rising corruption." 
    Astonishingly, even the Iraqi Minister of Oil in 2015 (and later Prime Minister) - Adel Abdul Mahdi - stated that Iraq "lost US$14,448,146,000" (more than $14 billion) from the beginning of 2011 until the end of 2014 as cash "compensation" payments to international oil companies.
    To put this in kind of understandable perspective: if that amount were put into dollar bills from one end to the other, it would stretch from Earth to the Moon nearly six times as much.
    In many cases, these payments to Western IOCs were concealed by the Iraqi authorities under a key clause related to Article 12.5 of the Iraq Long-Term Standard Service Contract ( LTSC ). 
    This confirmed that compensation related to lower levels of oil production was permissible for three reasons: first, in order to reduce the waste of associated gas; secondly, for any failure by oil and gas tankers to receive net production at the point of transfer through no fault of the contractor or operator; and/or thirdly as a result of the government's imposition of such a reduction.
     In turn, according to Article 12.5, compensation payments can be made in three ways: a revised field production schedule, an extension of the contract term, and/or actual cash payments to IOCs.
    However, as explained at the time by Ahmed Musa Jiyad, a former chief economist at the Iraq National Oil Company and now an independent development consultant, from the basis of the standard LTSC contracts  , there were two additional components that were included in the $14 billion - in addition to income lost during Only three years. First, overproduction above the base line, and second, the "net" wage fee. 
    There is a lot of hypothetical and highly personalized math involved in these calculations, but suffice it to say that based on baseline production, minus a 5% natural decline rate per year and then bonus contracts for the 10 domains covered by the  awarded LTSCs . In the first round of bidding he would have given a simple average of $2.50 per barrel. But in practice, the weighted average wage fee was around $1.90 per barrel, leaving $0.60 per barrel unaccounted for.
    "What this means for the various Western oil companies was a twofold risk," a senior oil and gas industry official working closely with Iran's Ministry of Petroleum told  OilPrice.com . “First, although it was not clear exactly where these additional payments were going, there was a risk that if it were discovered that they would end up in the pockets of officials, there would be significant damage to the reputation of the company involved, but inadvertently, Second, it meant that the compensation the companies were actually receiving was much less than what they had been subscribing to, and their margins were already very tight.”
    “What this might mean for a company like Shell [although there is no indication that Shell, BP or ExxonMobil knowingly engaged in any improper activities whatsoever in Iraq], is that they were receiving an actual compensation fee per barrel of 1.25 US dollars per barrel.
    for Majnoon and $1.70 per barrel for West Qurna 1 while it expected $1.39 per barrel for Majnoon and $1.90 per barrel for West Qurna 1, based on the major compensation figures contained in the contracts. 
    Likewise, he emphasized, “Exxon found that many obstacles suddenly began to appear in CSSP- related projects  , such as not approving contracts for service work, or for obtaining permits to build the infrastructure needed for pipelines and well drilling, and for something as simple as obtaining visas for workers and customs clearance. for biotechnical equipment.
    However, corruption is not the only reason for the mass exodus of Western oil companies from Iraq. The other key factor is that China, in particular, but also its partner in Middle Eastern affairs, Russia, with the two countries already controlling virtually everything worth having in Iraq's oil and gas sector and working to gain power over all the rest. 
    A notable example of this is that even before the company says  Exxon it wants to get out of  the " West Qurna 1," China was already on - site dominant, not only through the quota of 32.7 per cent owned  by PetroChina - arm listed company  the CNPC - but also During the gradual acquisition of a set of supposedly "contract-only" huge awards presented to Chinese companies for work in this field.
    These most recently included a $121 million engineering contract to upgrade facilities used to extract gas during crude oil production to  China Petroleum Engineering & Construction Corp. ("CPECC" ) exclusively highlighted by  OilPrice.com in this regard.
     Exactly the same contracting model was used in the Majnoon oil field from which Shell exited, where two game-changing contracts were signed: one with China's  Hilong Oil Service & Engineering to drill 80 wells at a cost of US$54 million and the other with the Iraqi Drilling Company To drill 43 wells at a cost of $255 million. 
    In fact, China is responsible for both, having provided the requested funds to the Iraqi Drilling Company as a "fee" for its participation, according to Iranian and Iraqi oil industry sources.
    Complementing this shift in power to China that has been underway since former US President Donald Trump began reducing the US presence on the ground in the Middle East is that the new independent company that will now receive BP's interest in Iraq's Rumaila oil field will be jointly owned by IOC China National Petroleum ( CNPC ). 
    This Chinese state oil company already owns a 46.4 percent stake in Rumaila - BP owns 47.6 percent and the remaining 6 percent owned by Iraq's state oil marketing organization - although a new stake split is not yet known.
    [You must be registered and logged in to see this link.]

    chouchou likes this post

    • Back to top
      Current date/time is Fri 04 Oct 2024, 12:23 am