Big Oil Back in Iraq

"A welcome-back party for Big Oil" is how the Wall Street Journal today sums up the Iraqi government plan to open up its oil fields to the highest bidders after three decades of tight control under Saddam Hussein. Starting next week, the Iraqi government will begin auctioning off contracts to foreign countries, opening up a market with 115 billion barrels in "proven reserves." "If all goes according to plan in the first round, foreign oil companies will move in to help Iraq revive production at six developed fields that have suffered from years of war and neglect," the newspaper writes. According to Reuters, Iraq has the third-largest oil reserves in the world and pumps out of the ground about 2.4 million barrels per day, well below the volumes seen before the 2003 U.S.-led invasion. "Oil Minister Hussain al-Shahristani is betting the contracts awarded on June 29-30, and a second round of tenders at year's end, will provide the cash and expertise needed to reverse the damage done to Iraq's oil infrastructure by decades of isolation, underinvestment and war," Reuters writes.

There are 32 companies angling for the contracts. They include Exxon Mobil (XOM), Royal Dutch Shell, Total, and BP, Reuters and the WSJ write.

The government is about to own one-third of the company, and the share price has plunged nearly 84 percent in the past year—a perfect time then for an across-the-board pay raise? That's the plan at Citigroup (C), the New York Times reports. "The troubled banking giant, which to many symbolizes the troubles in the nation’s financial industry, intends to raise workers’ base salaries by as much as 50 percent this year to offset smaller annual bonuses," the newspaper writes, citing sources in the know. And, in an effort to retain employees (and prop up the sinking share price), Citi will also award millions of new stock options, the NYT adds. The Financial Times points out there is one big hurdle if the new pay hike is to be implemented. The Citi pay rises would "have to be approved by Kenneth Feinberg, the Obama administration’s new 'pay Tsar.' " Expecting some push-back, Citi has already begun pitching the proposal to skeptical outsiders as a "pay adjustment" and not a compensation hike, the FT writes.

Boeing's (BA) new Dreamliner jet won't be taking off anytime soon after the jet maker again postponed the first flight of its much-hyped and much-delayed new addition to the fleet, the WSJ reports. Boeing cites a structural flaw—it has found problems with the aircraft body close the wings—that executives said was small "but which further dents the company's credibility and could hurt the new jet's future profitability." The Dreamliner program is nearly two years behind schedule and is testing the patience of its first customer, Japan's All Nippon Airwars Co. It "chastised Chicago-based Boeing for not providing guidance on an updated delivery schedule." The setback will likely cost the company millions of dollars in penalties and concessions to customers that have ordered the plane, writes the WSJ.

On the tech front now, and Oracle beat the street with a strong fiscal fourth quarter in terms of sales, profits, and new software bookings, Business Week reports. Oracle (ORCL) shares jumped 2.7 percent in extended trading as part of an 8.8 percent surge in the past three months. Despite investor confidence, the WSJ takes a more downbeat view, noting that Oracle's numbers show a revenue decline for the first time since 2002, as the company was "hurt by a strong dollar and companies' continued reluctance to spend on new technology projects." In other tech news, Intel and Nokia announced an alliance yesterday that is aimed at developing designs for new mobile devices and the chips that would be used in them, the WSJ notes.

And finally, Apple (AAPL) shareholders yesterday got some welcome news from an unlikely source—Methodist University Hospital in Memphis, Tenn. Doctors there posted to the hospital Web site on Tuesday an update on Apple CEO Steve Jobs' health status after it emerged this weekend that Jobs had undergone a liver transplant. How's he doing? "Mr. Jobs is now recovering well and has an excellent prognosis," a statement by Dr. James D. Eason, the hospital’s chief of transplantation, read. It's quite an about-face, the NYT reports. "As recently as Monday, a spokeswoman for Methodist said the hospital did not have any records to indicate that a patient named Steve Jobs had received any kind of treatment there. In its statement Tuesday, the hospital said it was making the disclosure with Mr. Jobs’s permission."