Dividends and French company Total signs $27 billion deals with Iraq for Oil, natural Gas and Water Projects

Every country in the world has friends and foes at some point because of strategic value to the country. The more developed countries in terms of economies tend to view other countries for their resources first and then the politics. Ideally the politics means the government treats the rest of the citizens reasonably well, but if the country has mineral wealth so much the better. The view has been around ever since the discovery of gold, if you remember you history there was the California Gold Rush which brought thousands of people to California and parts west and ensured those states would join the US, One can see gold rushes in areas of Alaska and Australia and many other gold producing areas.

In the oil business, the country of Iraq has the 3rd largest reserves in the world after Saudi Arabia and Russia, but its politics are not the same. The US and UK oil companies helped developed the oil fields, installed the Shah until the people of Iraq decided to go another way and the US imposed sanctions on Iraq. The oil is still there to be tapped and there were plenty of customers for the oil including Japan, China and Europe. This meant when the America companies left, other countries oil companies stepped in.

In an article by Samya Kullab of The Associated Press the French company Total signed $27 billion contracts to develop oil fields, natural gas and a water project. Total is a diversified company including an engineering part. the contracts were to develop the Ratawi oil field in southern Iraq, a gas processing hub to capture natural gas from 5 southern oil fields, a project to change salt water to fresh water and inject it into the reservoirs to maintain oil production. Another project was to develop a 1,000 megawatt solar power plant.

For generations ExxonMobil (including the Standard company name) has been in Iraq developing oil fields but has decided to pull out as well as BP is leaving Iraq and in steps Total.

Linking to dividend paying stocks, companies operate from a home base or headquarters and their job is to the shareholders and employees, while the country of their home base often has slightly different considerations. The world of geopolitics sometimes aligns with corporate interests, and sometimes it does not, this is one of the balancing acts the Board must deal with. When you invest in a company, you expect the company to sell its products around the world and often it does not say who can and can not buy. Sometimes the headquarter country is trying to do something else and the company is caught up in the geopolitics of the day. Geopolitics does change, how does your company deal with it?

There are more questions than answers, till the next time – to raising questions.

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