Iraq: an Opportunity or a Rival
Iran has to change its policy towards Iraq and consider it as rival not an opportunity
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According to news, Iraq invited 35 international oil companies to bid for contracts developing eight of its oil and gas fields last week. Iraq did not invite Iran to bid. About this issue and it’s affect on Iran- Iraq relations, Iran’s oil Minister said: "Iraqi government has talked to us about cooperation and participation in producing oil in some oil fields and building refineries in southern part of Iraq, thus hopefully this cooperation will take place soon". Although he is hopeful for participation of Iranian oil companies in rebuilding and exploring oil in Iraq, it seems that Iraqi government neither considers Iran in the above mentioned bid nor has any plan for participation of Iran in reconstruction of its oil industry. In fact Iraq is not interested in making strategic relations with Iran in some important affairs especially in oil sector. Thus the cooperation between Iranian oil companies and Iraqi government for exploring and producing oil in Iraq is an assumption resulted from unreal Iranian diplomacy towards Iraq.
No doubt that Iran could play role in Iraq after collapse of Saddam Hussein regime, this role could be played by Iran as an incident and unexpected result of U.S. invasion of Iraq, otherwise Iran could not interfere in Iraq during previous regime. The circumstances in Iraq after war have created a very good environment for investment to reestablish and reconstruct a new Iraq; this environment was suitable for many countries and also for Iran which found it a good chance to play an important role in Iraq. Thus the reason of new Iraqi government’s approach towards Iran is apparent. But will Iraq extend its cooperation with Iran to important sections such as oil sector? This seems to be impossible due to the following analysis: apart from the historical conflict between Iran and Iraq and by considering the new Iraqi government as a peace-seeking government looking forward for good relations with regional countries, it can be concluded that there is no common interest between the two countries that creates strategic relations between them. In fact both are trying to be regional powers and the important factor to reach this situation is strong economy.
Iranian and Iraqi economies are based on oil revenue that comprises 89 percent of their governmental budget. They have planned to boost production to 6 million bpd in next decade. Thus they are searching for foreign investment to increase the exploration and production of oil.
Thus, there is a competition between the two countries to attract foreign oil companies; this competition is more related to geo-politics than to commercial considerations. In fact, Iraqi government insists to increase exploration and production (E&P), at the same time U.S. supports it. A good example for this support is changing a contract between the Japanese oil company Inpex and Azadegan oilfield in Iran under the U.S. pressure by reducing the investment amount from 75 percent to 10 percent. By doing that, this company shifted to make investment in Iraqi oil industry under the support of U.S.
On the other hand, Iran and Iraq are members of OPEC and Iraq is competing with Iran in attracting international oil companies (IOC) to operate petroleum exploration and production (E&P) projects. This competition has increased due to decrement of supply and increment of oil demand. According to this issue, Iraqi policy towards Iran in energy section has to be clear.
It is clear that Iraq will exploit the sanctions imposed on Iran by U.S. to attract oil international companies to come and invest in it. Therefore, Iran has to change its policy towards Iraq and consider it as rival not an opportunity. Iran has to increase its relations with international society to win the competition with Iraq in the region.