Yesterday, I discussed the Chinese bid for Unocal and how progressives ought to view the move. Today the Financial Times reports that Iran's newly elected president, Mahmoud Ahmadi-Nejad, is considering a "total overhaul" of the Iranian oil sector, to include increased foreign investment under conditions that favor Chinese investors. The timing could not be more interesting.
So I'm still arguing that progressives are better served by allowing China to enter the global energy major leagues rather than excluding them and thus pushing China to seek out energy supplies by non-economic means. Today's Iranian development just reinforces the conundrum for Bush's fossilized energy strategy.
First, the Iranian move. The FT article, by Carlos Hoyos and Gareth Smyth (sorry, this one is subscription only) describe conditions that are not economically attractive to private-sector energy companies like those in the United States, Europe and Japan. The new Iranian president has vowed to protect Iranian oil companies by continuing to back a type of contract, a "buy-back," that presents an obstacle to foreign investors. Here's a clip from the FT:
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