Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest fields, according to ministry officials, oil company officials and an American diplomat.

The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.

The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq's Oil Ministry.

A US human rights activist on Tuesday warned China that it risked rebel attacks against its oil interests in Sudan unless it put pressure on its ally Khartoum to end the violence in Darfur and south Sudan.

John Prendergast told reporters that Beijing, a veto-wielding council member which has close energy ties with Khartoum, has a "disproportionate responsibility" in helping find a settlement to the conflicts in Darfur and south Sudan.

"They (the Chinese) must fulfil that or else we are going to see Sudan burn and one of the first things that is going to burn is China's own economic interests," he added after he and other Darfur activists met with members of the UN Security Council.

Prendergast, a former Africa expert at the National Security Council and the State Department, said he had just returned from a trip to south Sudan where recent fighting in the flashpoint oil-rich region of Abyei had threatened a return to civil war.

Jeremy Scahill: That's a very interesting question, and I don't know. Blackwater has a private intelligence company called Total Intelligence Solutions that offers what they describe as "CIA-type services" to Fortune 1000 corporations when they go into hostile areas. The U.N. Working Group on the Use of Mercenaries said recently about Latin America that, and I quote, "an emerging trend in Latin America and also in other regions of the world indicates situations of private security companies protecting transnational extractive corporations whose employees are often involved in suppressing legitimate social protest of communities and human rights and environmental organizations of the areas where these corporations operate." It's on right now, and it's growing by leaps and bounds.

I think it would be very difficult for local people in those communities to even know who did the action if mercenaries did it. Nigerians knew exactly who the people were who attacked them, from their insignias on their uniforms. And that information is being used in the case brought against Chevron. In the case of these private companies, often they operate with no indicator of who they are. It would take a huge amount of effort just to discover who the hell it was doing the torturing or whatever. We've already seen that its tremendously difficult to get any information about the official work of official forces, not to mention when you put it through layers of secrecy that come with contractors and subcontractors.

Ten years ago I could never have imagined I’d be doing this,” says Greg Pal, 33, a former software executive, as he squints into the late afternoon Californian sun. “I mean, this is essentially agriculture, right? But the people I talk to – especially the ones coming out of business school – this is the one hot area everyone wants to get into.”

He means bugs. To be more precise: the genetic alteration of bugs – very, very small ones – so that when they feed on agricultural waste such as woodchips or wheat straw, they do something extraordinary. They excrete crude oil.
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What is most remarkable about what they are doing is that instead of trying to reengineer the global economy – as is required, for example, for the use of hydrogen fuel – they are trying to make a product that is interchangeable with oil. The company claims that this “Oil 2.0” will not only be renewable but also carbon negative – meaning that the carbon it emits will be less than that sucked from the atmosphere by the raw materials from which it is made.
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Inside LS9’s cluttered laboratory – funded by $20 million of start-up capital from investors including Vinod Khosla, the Indian-American entrepreneur who co-founded Sun Micro-systems – Mr Pal explains that LS9’s bugs are single-cell organisms, each a fraction of a billionth the size of an ant. They start out as industrial yeast or nonpathogenic strains of E. coli, but LS9 modifies them by custom-de-signing their DNA. “Five to seven years ago, that process would have taken months and cost hundreds of thousands of dollars,” he says. “Now it can take weeks and cost maybe $20,000.”

Because crude oil (which can be refined into other products, such as petroleum or jet fuel) is only a few molecular stages removed from the fatty acids normally excreted by yeast or E. coli during fermentation, it does not take much fiddling to get the desired result.