By Porter Stansberry in the S&A Digest:
Iraq completed its first round of oil auctions, and only one company - British oil giant BP - won a contract. BP will pump oil from the Rumaila oil field, which has 17.8 billion barrels of oil reserve. The company will earn $2 a barrel for every barrel it pumps out over 1 million barrels per day. Iraq expects output can reach 3 million barrels per day. BP originally wanted $4 per barrel, but the Iraqi government countered with $2. ExxonMobil offered $4.80 and wouldn't accept anything lower. It backed out of the bidding.
At $2 per barrel, Iraqi officials estimated foreign companies could have earned $16 billion in total. Meanwhile, with oil at $50, Iraq would take home $1.7 trillion. Maybe they can afford to pay us back for the war...
As we've pointed out before, a few billion dollars to the world's largest oil companies is a rounding error... And while it's exciting Iraq is opening up its massive reserves to foreigners, you won't make any money investing in the oil majors.
Crux note: Phase 1 Investor, Stansberry Research's highest-end research service, recently released its two favorite microcap Iraqi oil stocks. One of these companies has a near monopoly for drilling oil wells in Iraq... The other company owns parts of eight oil fields in Iraq, two of which are in production. To learn more, click
here.
More on Iraqi oil:
Huge crude oil deal closes in Iraq...
Iraqi oil update: Russians join the mad dash
How to get in early on the greatest untapped oil field in the world
