14/03/2017 by Richard
Iraq may be best known for its turbulent past over recent decades, but it has a huge amount of mineral wealth beneath its surface.
The Middle Eastern country is also often referred to as the ‘cradle of civilisation’, because the fertile Tigre-Euphrates valley in the south of the country was home to the Sumerians, the world’s earliest known civilisation.
The Turkish Petroleum Company (TPC) was the first to pursue oil exploration in Mesopotamia (the area now covered by Syria and Iraq), which was then in the Ottoman Empire. The Anglo-Persian Oil Company (controlled by the British government) owned 50% of the TPC, with other prominent European companies owning the remaining shares, such as the Anglo Saxon Oil Company (part of Royal Dutch Shell), the National Bank of Turkey (which was actually a British group), and Deutsche Bank. While the TPC was promised a concession by the Ottoman Empire, the outbreak of World War I halted its exploration efforts.
Following the division of the Ottoman Empire by the Treaty of Sèvres, Iraq’s modern borders were drawn up in 1920, with the country being made a British mandate by the League of Nations. The TPC eventually received its concession in 1925, and oil was first struck in 1927. Following this, the TPC went into partnership with the Near East Development Corporation, a consortium of five big US oil companies. In 1929, the TPC became the Iraq Petroleum Company (IPC).
The process of oil nationalisation began when the Iraqi government (under Abd al-Karim Qasim) passed public law 80 in 1961 to expropriate 95% of the IPC’s concessions. The government later formed the Iraq National Oil Company (INOC) in 1966 with financial and technical support from the Soviet Union. Nationalisation was completed by 1972, and by 1980, INOC had managed to raise the country’s oil production to over three million barrels a day. Unfortunately, war then broke out with Iran following the revolution of the previous year, severely hindering capacity.
Iraq has since experienced a string of calamities, including the First Gulf War after Saddam Hussein’s invasion of Kuwait, a long period of sanctions, and the Second Gulf War of 2003. ExxonMobil (which produces lubricants like Mobil DTE 25) and other international oil companies were later invited back into the country. Despite insurgencies and sectarian violence, as well as the presence of ISIS in the western region, Iraq has managed to raise its production to almost five million barrels a day.
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