Baghdad Texas Tea

USA oil drilling companies will make tens of billions of dollars from the new petroleum activity in Iraq long before any of the oil producers start seeing any returns on their investments.
Lukoil and many of the other international oil companies that won fields in the auction are now subcontracting mostly with the four largely American oil services companies that are global leaders in their field: Halliburton, Baker Hughes, Weatherford International and Schlumberger. Those four have won the largest portion of the subcontracts to drill for oil, build wells and refurbish old equipment.

“Iraq is a huge opportunity for contractors,” Alex Munton, a Middle East analyst for Wood Mackenzie, a research and consulting firm based in Edinburgh, said by telephone.

Mr. Munton estimated that about half of the $150 billion the international majors are expected to invest at Iraqi oil fields over the next decade would go to drilling subcontractors.

The 11 contracts Iraq signed with oil majors, including the six for the largest fields, are intended to raise Iraqi output from about 2.8 million barrels of oil a day now to 12 million barrels daily in 2017. On average in 2002, the year before the United States invasion, Iraq produced only 1.9 million barrels of oil a day.

Most outside experts, including those at the International Energy Agency in Paris, are skeptical of the production targets. The I.E.A. predicts that Iraq will not surpass six million barrels a day until 2030.

Investment ideas: HAL, BHI, WFT, & SLB