Big oil company BP plc (ADR) (NYSE:BP) is currently in talks about pumping up oil at the Kirkuk Oil Field in Iraq. They are bidding to produce 300,000 barrels a day at one of the oldest Iraq’s oldest oil fields.
Currently, the Iraqi government officials gave fifteen licenses to foreign oil and energy companies. In two months, they plan on auctioning off more drilling rights.
The only thing that could possibly hinder BP’s plans for pumping oil in Iraq is politics. The Oil Ministry does not want to sign business agreements that involve the autonomous Kurd region in Northern Iraq and they are not certain if they want to work with Exxon Mobil(NYSE:XOM) in oil production plans. Depending on where BP wants to get their oil, they may have a hard time securing a deal much like Exxon Mobil.
The deputy director general of North Oil Company in Iraq, Hussain Gholam, says that BP has a real shot at securing this deal because they are one of the most “competent” companies in the bidding process.
BP was originally christened the Anglo-Persian Oil Company when it was found in 1909. Later on in the 1950s, the company was renamed British Petroleum and in 1998, they acquired Amoco, which eventually folded a little over a decade ago. The company is headquarted in London, England and they oversee everything in the process of both the gas and oil industry. They currently have a world-wide presence in about eighty countries and last year they were named as the third and fourth largest in energy and in the world respectively.
If BP gets what they want and starts pumping in Iraq, they will probably become even bigger as a company. I wonder how this will affect the oil industry in terms of price and competition. It’s also possible that British Petroleum could monopolize the world’s oil industry.