Shell hopes to redeem itself in Iraq
Troubled oil group Shell intends “to establish a material and enduring presence in Iraq’’ in an attempt to rebuild the firm’s depleted reserves and foster the long-term future of the country’s energy sector.
The vote of confidence from Shell, which is embroiled in controversy over exaggeration of its oil reserves, came after rival BP expressed disillusionment with Iraq’s prospects. BP chief executive Lord John Browne said last week that private firms might not have a role to play there.
The immediate prospects for Shell pressing ahead with reconstruction remain grim. Amec, a contractor in Iraq, said that its staff there were “hunkering down’’ as the security situation has deteriorated and work had been halted.
Shell has suffered from internal difficulties with the exit of its chairperson and two other directors, and needs to find new oil reserves to replenish its dwindling stocks.
“We would welcome the opportunity to help Iraq build its energy industry, once the security situation allows and an internationally recognised Iraq government is established,’’ a Shell representative said. “We are interested in building a long- term relationship with Iraqis.’‘
Shell was keen to outline its position after Browne suggested at BP’s first-quarter results meeting that the presence of Western oil companies could destabilise a sensitive situation.
“It’s not obvious to me you need foreign oil companies to rebuild the energy sector in Iraq and it might best be left to a local, state-owned group,’’ the BP chief said.
Yet 18 months ago Browne had expressed fears that American energy firms might carve up the spoils in Iraq and leave European firms such as his out in the cold.
Amec was reluctant to comment on the situation in Iraq, where it has built a presence after winning water and power infrastructure deals.
Amec is the only big winner in the $18,5-billion contract bonanza in Iraq from the coalition forces, gaining three prime management contracts in a joint venture with Fluor of the United States. It has set up a coordination team, which is still awaiting its task orders.
Amec is working on a separate power contract in support of Fluor in an area near Baghdad. — Â