Oil Giants Bend to Iraq's Terms

If the Iraq war was fought for oil, it’s done little to enrich American oil companies, which are just now striking deals to service the country’s fields—and at far worse terms than they’d hoped. Most companies balked at Iraq’s initial service contract offers, refusing to bid in a June auction. But in the past month, many have swallowed their pride and inked nearly identical deals, the New York Times reports.

The oil giants were after production-sharing agreements, but to Iraqis those deals smacked of colonial times, when foreign companies controlled the country’s fields. They favored service contracts, which pay the companies a fee per barrel produced. The profit margins are tiny, but the companies have accepted, believing they need to get a foothold in Iraq. They’re hoping for better contracts later on, and a crack at the loaded Basra fields. (More Iraq oil stories.)