Wednesday, February 06, 2008

On Exxon Mobil's Reported "Interest" in Developing Iraq's Oil Industry

Cody Lyon

A Wednesday report from Reuters is saying that Exxon Mobil is “interested in helping to develop Iraq’s huge oil reserves. According to the February 6 report, the company declined to comment on whether it has registered yet to compete for contracts there.

The “Reuters” report also says that spokesperson Len D’Eramo said in an emailed statement “if the Iraqi government decides it wants international oil companies to partner with them in developing their resources, Exxon Mobil would be interested in participating."

The report said that D’Eramo wrote in the email that Exxon “would pursue profitable business opportunities as they arise in Iraq, just as it would in other countries in which is permitted to operate.”

While it’s not surprising that oil companies have long been interested in “developing” the resources of oil rich nations, there is a bit of collective bewilderment and sad resignation at the fact that this monolith of energy production is admitting its interest in nightmare stricken Iraq just a few days after reporting the largest profits ever for a United States corporation. Add to that, if Exxon Mobil takes part in the rebuilding of Iraq’s infrastructure, its profits only stand to increase thanks to PSA’s in Iraq’s oil law, profits that will increase the company’s corporate windfalls.

But, will those increasing windfalls benefit everyday Americans in any way like lower gas prices or perhaps investment in cleaner energy or alternative fuel initiatives?

According to Consumer Federation of America and Consumers Union, between January and May 2007, gasoline prices increased 80 cents, 60 cents of that going toward increased refining and marketing prices.

Some blame ongoing gas pump price increases on a lack of competition that allows the few large oil companies to exploit tight markets. Others say those prices were driven up by those same companies participating in “speculative” energy markets.

Regardless, there are a couple of easy to comprehend political issues that need to be addressed more openly and aggressively on the campaign trail. Democrats should be demanding that the US treasury re-coup billions of dollars in US tax subsidies to oil companies. A Senate measure to do just that, failed by one vote last year.

And then there’s a corporate windfall tax that so many seem to shudder at the very mention of.

We can only hope that candidates will spell out, and tout a corporate windfall profits tax. And, there’s always the hope that the additional tax money will be promised to fund clean or alternative energy initiatives under close government scrutiny.

As things stand, the Wednesday report from Reuters noting Exxon-Mobil’s interest in Iraq, seems to be at least part of the ugly crystal ball images some clearly saw back when the drumbeats for war for war began to roll.
Link to Iraq Oil Law story (2007)

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