The Iraqi Oil Bull Market

Filed in dividend, economy, Gold, GOld juniors, Guidance, lead, ubs by on May 11, 2010 0 Comments

With the dreadful war in Afghanistan now grabbing all of the headlines, Iraq has somehow slipped well below fold. In fact, quelled by the controversial troop surge, the picture in Iraq actually seems to be improving nearly everyday. And while normalcy isn’t exactly a word that comes to mind when describing this troubled country, progress comes easy when you start from the ruble of ground zero. That has been the story— at least in the Iraqi oil industry, where things had gotten so bad under Saddam Hussein that outpacing the old production figures was a pretty low bar to clear. What’s more, even though Iraq can claim to have the world’s third largest proven reserves of conventional crude, current production levels are still well below the country’s 2003 pre-war output. Advertisement The world’s 8 th largest economy just mandated the use of this company’s wind power. Get in now, and ride it for a quick 112%. Click here. The result is that, given the range of possibilities, Iraq’s contribution to the world oil scene is still pretty pathetic. After all, dictators, wars, and civil unrest aren’t exactly production boosters when it comes to pumping oil… That’s because without the involvement of big international companies such as Shell (NYSE: RDS-A ), BP (NYSE: BP ), and Exxon Mobil (NYSE: XOM ), maximizing production in these fields is nothing but a fairy tale. As guys like Venezuelan dictator Hugo Chavez have since found out, oil can’t be simply wished out of the ground. Oil in Iraq: The Next Big Opportunity Fortunately for Iraq, though, the situation is about to change pretty dramatically over the next six or seven years. Iraq has finalized 10 new contracts, recently awarded to foreign oil companies as the nation looks to revamp an oil sector battered by years of sanctions, neglect, and violence. And with Iraq now poised to begin the first major overhaul of its energy sector in decades, investors stand to benefit in a big way from the multi-billion dollar effort to redevelop the country’s oil economy. For the international firms that won the development rights in these fields, the 20-year contracts are their first chance to pump Iraqi oil since Saddam Hussein expelled foreign firms and nationalized the sector during the 70s. It’s a project described by some analysts as the greatest opportunity in the oil patch today, along with the oil boom in the Bakken . Here’s why: If all goes according to plan, Iraq will eventually produce 12 million barrels per day — 10 million more than it pulls …

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The Iraqi Oil Bull Market

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