Five years after the U.S. military moved into Iraq, it's beginning to look like the nation may be moving toward a boost to its oil output. And it stands to do so by encouraging a second western wave, this one made up of big oil companies.
On Monday, with crude prices higher than $140 a barrel, the nation opened its half-dozen biggest fields to bids by U.S. and European companies. But don't expect Iraq's oil output to jump overnight. The development contracts, which could involve such pre-qualified producers as Royal Dutch Shell
In the meantime, the country is seeking short-term agreements for technical support from foreign companies in an effort to boost production at the largest Iraqi fields by a total of about 500,000 barrels a day. Iraq currently produces about 2.5 million barrels a day, although Oil Minister Hussain al-Shahristani has stated that he'd like to raise that level to about 4.5 million barrels by 2013. The nation's proven reserves now total 115 billion barrels, but there's a belief that as-yet-unproven reserves could more than triple the current total.
So what's this mean for Fools with a taste for energy investments? For my money, it once again proves the value of holding positions in the big integrated companies that are able to roam the world to find and develop oil and gas reserves. From the list above, I'm especially partial to ExxonMobil and Total.
For related Foolishness: