{6/22/09}Allen Dulles would be proud. At the end of June Iraqi Oil Minister Hussain Shahristani will award oil field service contracts to the world's largest oil companies to develop six of Iraq's largest oil fields over the next 20 years {3/21/09}. The fall in oil prices has placed the dysfunctional Iraqi government in a financial crisis. 80% of revenues pay for current expenses, leaving little to pay for reconstruction of Iraq's war torn oil infrastructure. The companies will be paid a fee for restoring production and then increasing oil output. Iraq needs around $50 billion over the next five years to raise the current production level from 2.5 million barrels a day. The long term contracts put the foreign companies in a favorable position when bidding starts for exploration of undiscovered reserves which experts believe will be found. Little exploration took place under the Hussein regime. The expertise and money can only come from outside Iraq given the country's inability to properly manage long term projects, where jobs are allocated to political factions regardless of experience or abilities.Update: On the day American forces withdrew from Iraqi cities prompting fireworks and celebration, the Iraqi Oil Ministry announced it had struck a deal with a BP/CNPC led consortium to service the giant Rumaila oil field in the Shi'ite south of Iraq. The other fields up for bid did not find takers. The international companies participating in the auction wanted higher fees per barrel produced than the government was willing to pay. Shell offered $7.89 a barrel for the Kirkuk field in the Kurd north. The government was only offering a flat $2.00 barrel which only BP/CNPC accepted. The sale drew intense criticism from Iraqi nationalists who saw it as step towards denationalization of its vast reserves. Another sale of undeveloped fields will be held later this year.