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The Iraq War was fought for oil -- now we have none of it

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Now that Iraq is an independent country, the oil ministry has started putting its oil fields up for bid to foreign investors, as reported in The Wall Street Journal (subscription required).

Bidding started this week and is not going well according to oil executives. The reason is that Iraq is cutting its payout to the bone. Only one consortium, led by BP (NYSE: BP) and including China National Petroleum Company, ended up staying in the bidding and making a deal. All other oil executives walked away from the bidding.

To close the deal, the consortium had to lower its payout bid from $3.39 per barrel to $2.00 per barrel for the Rumalia field in southern Iraq. The $2.00 payout is for any new oil production that companies produce beyond current levels.

Bidding will continue next week for oil fields that have not yet been developed.

Iraq's oil minister, Hussain al Shahristani, is driving a hard bargain for Iraq's oil and is unwilling to give up any concessions to foreign buyers.

What is so disheartening after years of war in Iraq and thousands of lives lost and many thousands more wounded, we now find that this war was fought in vain. For it was Alan Greenspan who said: "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil." Oil was the motive and oil we did not get. Rather we have thousands to wounded and broken men and women suffering from post-traumatic syndrome. Our hearts and prayers are with them.

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Last updated: November 27, 2009: 11:57 AM

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