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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (43315)	12/15/2003 12:43:52 AM
From: energyplay	Read Replies (1) \| Respond to of 74559

Hi Ray - Rip offs of Iraq aren't quite a done deal. I expect there will be attention paid to apperances, for the Arab world, Europe, and domestic US politics. As for ripping the US taxpayer, that's not what I was refering to. In some ways the Haliburton rip might be diversion - everybody understands the price of a gallon of gasoline, and 71 cent to $2.64 is easily seen as excessive. Lots of publicity, maybe a trial or hearing, Halliburton forced to disgorge excess profits. Fills up any news holes about Iraq so other stories can't get through. I know was gasoline costs, but I don't know about downhole pumps, pump jacks, separators, or the cost of cementing, fracing and completing. I would expect that the Iraqis will still own the oil fields- but the operators of the oil fields, who bring in "expertise" and equipment, might be joint ventures mostly owned by Iraqis. These joint venture companies would have long term contracts to develope oil fields. Of course, they would be buying expertise, equipment, and getting capital from their joint venture partners, who would expect a reasonable (reasonable for Houston, Texas) return on their investments.... So money would move out as the cost of developing and operating fields. Transport infrasturcture would also need to be improved, and similar set ups could take another bite of the apple as the oil moves out... Of course, oil sold on the world market needs buyers. While some will be sold on the spot market, the transport companies are likely to sell most of it on long term contracts to major oil companies. The prices on these contracts would be close to actual spot prices at the time. Of course, it often seems that the transport companies seem to pick times near the bottom in oil prices to sign multiyear contracts.... And everyone knows that a big flood of Iraqi oil will push prices down. Opps, almost forgot - the Iraqis will need accounting help. Maybe some former Arthur Anderson parteners could be hired to help. Chugs, energyplay