Control of oil in Iraq

[ken hanly <northsunm@xxxxxxxxx>]

This plan obviously retains "ownership" by the "Iraqi
people" but as a convenient fig leaf to hide actual
control by big oil companies.

IRAQ: Law to allow Big Oil takeover

Doug Lorimer

?We need to change the way we run the oil sector in
Iraq. We need to engage with the major oil companies
who will bring in investment as well as technology?,
Barham Saleh, deputy PM in Washington?s puppet Iraqi
government, told journalists on the sidelines of a
September 10 US-led International Compact for Iraq
conference in the United Arab Emirates.

Associated Press reported ?Saleh said Iraqi leaders
were nearing agreement on a long-awaited hydrocarbon
law that would allow potentially huge investments by
foreign companies in Iraq's oil sector?, which was
nationalised in 1972 and is currently administered by
the oil ministry and two state-owned oil companies.

?The absence of a legal framework governing
investments and ownership of the country's oil
resources has hampered foreign investment in the
sector?, AP added.

In March 2005 BBC TV?s Newsnight program reported that
US President George Bush?s administration ?made plans
for war and for Iraq's oil before the 9/11 attacks?.
Newsnight reported that ?insiders? said the
administration?s planning for a war on Iraq and
sell-off of its huge oil resources had begun ?within
weeks? of Bush taking office in 2001 ? a year before
the 9/11 attacks on the World Trade Center.

Newsnight reported that the Bush administration?s plan
to rapidly sell off Iraq?s oil industry ?was given the
green light in a secret meeting in London headed by
Fadhil Chalabi shortly after the US entered Baghdad,
according to Robert Ebel?, a former US Energy
Department official and CIA oil analyst.

Fadhil Chalabi was an official in the Iraqi oil
ministry in the 1970s and is a cousin of convicted
bank embezzler Ahmad Chalabi, head of Pentagon-backed
Iraqi National Congress exile group. The INC provided
much of the fabricated ?intelligence? on Iraq?s
non-existent arsenal of ?weapons of mass destruction?
that was used by Washington as the pretext to invade
Iraq in March 2003.

?Philip Carroll, the former CEO of Shell Oil USA who
took control of Iraq's oil production for the US
government a month after the invasion, stalled the
sell-off scheme?, Newsnight reported.

?New plans, obtained from the State Department by
Newsnight and Harper's Magazine under the US Freedom
of Information Act, called for creation of a
state-owned oil company favoured by the US oil
industry. It was completed in January 2004 under the
guidance of Amy Jaffe of the James Baker Institute in
Texas. Formerly US Secretary of State, Baker is now an
attorney representing Exxon-Mobil and the Saudi
Arabian government.?

The US and British oil companies wanted a Saudi-style
arrangement whereby Iraq?s oilfields would remain
nationalised but the international oil companies
(IOCs) would take over their management through
?production sharing agreements? (PSAs).

On September 10, AP reported that Saleh told
journalists he favoured PSAs as the form of IOC
investment in Iraq?s oil industry. Saleh said the
national policy council negotiating the new
hydrocarbon law would present a draft to parliament by
year's end and predicted it would be voted into law
before the end of the year.

Iraq's proven oil reserves stand at about 115 billion
barrels, the world's third-largest after Saudi
Arabia?s and Iran?s.

Writing in the June 5 Middle East Economic Survey,
Tariq Shafiq, founding executive director of the
state-owned Iraq National Oil Company (set up in
1964), pointed out that the oilfield development cost
per barrel in Iraq is around US$1. The comparable cost
in the North Sea, for example, is around $8.

He argued that PSAs would place Iraq?s oil industry
under the control of the IOCs. ?This would take Iraq
back to the concessionary era with all its drawbacks,
including serious infringement of Iraq?s sovereignty?
and ?its near total financial dependence then on
IOCs?.

>From Green Left Weekly, September 27, 2006.
Visit the Green Left Weekly home page.


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