Visiting Al-Amarah to boost the morale of troops fighting Shia rebels on Monday, Iraq's Prime Minister Nuri Al-Maliki vowed that forces loyal to the government would continue their offensive in the southern province until anti-government armed groups are uprooted. The onslaught is an extension of military operations that began in Basra in March to end rebel control of Iraq's second largest city.
(...) The answer seems to lie in oil. The two southern provinces sit on a lake of 150 billion barrels, i.e. 95 per cent of Iraq's oil reserves. The northern province provides Iraq with its only oil export outlet to the Mediterranean. With oil prices nudging $140 per barrel and the US economy on the verge of freefall, Washington seems to have decided that it cannot wait any longer to use Iraq's huge reserve to increase output and lower the prices. On 19 June, The New York Times reported that Shell, BP and Exxon Mobil, Total and Chevron, heirs to the infamous seven sisters cartel that dominated world energy production in the latter half of the 20th century, were close to signing deals with Iraq to develop its oil and gas fields. The report came after Baghdad said it is about to sign agreements with international oil firms to revamp Iraq's oil fields, ravaged by the war and sabotaged by armed groups. Under the deals, worth around $500 million, the five firms will help overhaul Iraq's oil fields to boost the current production by 600,000 barrels a day, an increase of nearly 20 per cent.