BP ‘has gained stranglehold over Iraq’ after oilfield deal is rewritten

Terry Macalister, The Observer

7/31/2011

New terms mean company will be paid even when production is disrupted, critics claim

BP has been accused of taking a “stranglehold” on the Iraqi economy after the Baghdad government agreed to pay the British firm even when oil is not being produced by the Rumaila field, confidential documents reveal.

The original deal for operating Iraq‘s largest field – half as big as the entire North Sea – has been rewritten so that BP will be immediately compensated for civil disruption or government decisions to cut production.

This potentially could influence the policy decisions made by Iraq in relation to the OPEC oil cartel, and is a major step away from the original terms of an auction deal signed in the summer of 2009, critics claim.

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