Foreign Oil May Be Next Target of Iraq's Violence

Bombings in Baghdad last week--the latest in a spate of deadly attacks around the country--spell trouble for Iraq's tenuous peace. For now, the resurgent violence has been aimed mainly at government ministries. But some worry that the next target could be foreign oil companies--a move that would be disastrous for the country's economic development. A recent memo from PFC Energy warned that a new round of civil violence in Iraq could "seek to target international oil companies." So far, foreign oil has been a negligible presence in the country, says PFC analyst Raad Alkadiri. But an uptick in visits from oil executives earlier this year suggests that companies are starting to cautiously venture into Iraq. Now oil companies represent an increasingly high-profile target, and an attack on them would be a significant coup against the central government, which is looking to oil production to fill its coffers and prop up its power. Alkadiri draws the parallel with states like Nigeria, whose oil sector has become a major target for its rebel groups. "Iraq could be Nigeria on ­steroids," he says. "Essentially what you have is a state that doesn't have a monopoly on force. Looking forward, there is certainly the possibility that the Nigerian situation could be repeated." The Obama administration is pushing hard for companies to invest in Iraq, and its oil wealth could make it the next big boom market--unless civil violence hits the oilfields first.