Oil companies dip toe in Iraq pool

BAGHDAD, June 28 (UPI) -- A move by four Western oil giants to sign service contacts with Iraq's oil industry is unlikely to trigger any big new investments in Iraq, analysts said.

Despite record-high oil prices, big oil has been reluctant to make any large-scale commitments to Iraq because of the lack of security and the inability of the government to agree on oil revenue-sharing laws. A Friday deal in which Exxon Mobil, Shell, Total and BP agreed under no-bid contracts to provide services for Iraq's aging oil infrastructure, while encouraging, probably isn't the tip of any Western investment icebergs, The Times of London reported Saturday.

"I think it's an important step in the right direction but I don't think it's significant," Wayne Kelley, an engineer with RSK Energy consultants, told the newspaper. "It's totally insignificant in the global oil market," he said, adding, however, that it could be "psychologically important" for Iraqis in the absence of permanent legislation to divide revenue among its feuding provinces.

Analysts said investments such as locating staff into the country are still considered far too dangerous by many companies. As an alternative, they will provide services from neighboring states, the newspaper said.