• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 1 hour Judge Orders Trump To Release Tax Returns
  • 12 mins EU has already lost the Trump vs. EU Trade War
  • 3 hours The lies and follies of the "cry wolf" enviros: No more fire in the kitchen: Cities are banning natural gas in homes to save the planet
  • 4 hours China's Renewables Boom Hits the Wall
  • 4 hours Iran Finds New Oil Field With Over 50 Billion Barrels: Rouhani
  • 4 hours CHK Trading @ 90 Cents
  • 17 hours China Burns More Coal than the Rest of the World !
  • 12 hours Offshore SE Asia: Offshore OFS Could Get Major Boost in SE Asia
  • 19 hours New York State Taxpayers Lose 900 Million to Tesla
  • 16 hours "Climate Migrants"
  • 24 hours Giant Windmills Wildly Unpopular
  • 16 hours Does Brazil Auction Flop Forbode the Outcome of the Saudi Aramco IPO ?
Alt Text

Iran's Impossible Task: $194 Oil

As the global economy continues…

Alt Text

Chinese Oil Imports Soar To Record High

China’s crude oil imports reached…

Alt Text

Is U.S. Shale Circling The Drain?

There’s a lot going on…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Premium Content

The Gold Rush in Iraq

There is a Gold Rush Underway in Iraq, with major implications for the rest of us. The success of the recent oil auctions in Iraq is creating a windfall for American oil services companies.

Schlumberger (SLB), Baker Hughes (BHI), Weatherford (WFT), and Halliburton (HAL) have committed to drilling 2,500-3,000 new wells per year and building new pipeline and shipping terminal infrastructure that could make Iraq the world’s largest oil exporter. The value of these contracts may reach a massive $60 billion over the next six years, and could generate $1 billion in new revenues for each company per year.

Two offshore terminals are already under construction, and another two are on the drawing board. If successful, the project will boost the country’s oil production from the current 2.5 million barrels a day to 12 million b/d by 2016.

Iraq’s oil production peaked at 3 million b/d in 1979, and then went to nearly zero after it invaded Iran. I remember those days well, as I was issued a visa to accompany Saddam’s troops to Tehran, only to see it cancelled when the Iranians were able to mount a counter offensive. I still have the dessert camos and telephoto lenses need to cover the desert war, although the pants, regrettably, no longer fit.

Iraq’s oil industry never recovered. UN sanctions limited the regime to minimal “official” exports that covered humanitarian imports like baby food and drugs. Tanker trucks smuggled out through Jordan what they could, with the proceeds going directly to Saddam’s family. When the US invaded, bails of hundred dollar bills were found stashed in private homes, the proceeds of these black market deals.

American oil engineers were shocked by the poor state of Iraq’s energy infrastructure after 40 years of neglect. It all has to be rebuilt from scratch. If the new Iraqi government can provide the necessary infrastructure, and stabilize the political and security environment, it will become one of the largest changes to the landscape for international trade in decades.

Those are all very big “ifs”. It will dump another Saudi Arabia’s worth of crude on the market. It will also go a long ways towards meeting China’s insatiable demand for oil, as well as that of other emerging economies, and put a long term cap on prices. 

Of course, this is the scenario that antiwar activists and conspiracy theorists feared eight years ago, but no one thought it would take so long to play out. With an oil man as president, a vice president from Halliburton, and a secretary of the army from Enron, who can blame them.

Early in the planning of the war there was an expectation the US could defray some cost of the war with newly freed oil exports. I know, because I was there, my eight years in the Persian Gulf earning me an appointment as an outside consultant. I bailed when I saw the whole project was hopeless. Ever notice that Iraq’s oil industry was never targeted during either gulf war? These are usually prime targets in modern warfare.

This is so important that I can’t believe no one else is talking about it.  Yes, I know you’ll feel guilty making money off of a pariah stock like Halliburton, but you can always donate your profits to the Sierra Club.

By. Mad Hedge Fund Trader




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Anonymous on October 18 2010 said:
    Well, at least you didn't try to pretend that the whole war wasn't about oil (as the sane among us have always known). I guess that's progress.However, even if every $1 turned into $1 million, I would never invest in any of those war profiteers. I have enough blood on my hands as it is just from paying taxes.
  • Anonymous on November 04 2010 said:
    You state that Schlumberger, Baker Hughes,Weatherford and Hlliburton are going to drill 2,500 to 3,000 oil wells.What is your reference to "drill". Tell us how many drilling rigs, if any, that these companies own?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play