Iraqi Oil Agreement Reveals the True Winners in Iraq
The new oil revenue-sharing agreement is a giveaway to Big Oil and could end up tearing apart the country.
The Iraqi oil deal set to go before the country's parliament next month could spell the end of the country as a nation state, and signals a major Bush victory in the war. The proposed law not only opens the door to the big international oil companies, but offers them lucrative contract deals, and even a place on the national oil board that will run the industry.
The Byzantine scheme for dividing up oil revenues on the basis of population is little more than a facade for the biggest rip off of resources since the British barged into Mesopotamia more than a century ago.
This law sanctions contracts between Iraq's individual regions and foreign oil companies. It effectively puts an end to a nationalized petroleum industry that has provided most of the country's revenue. Over time, the oil revenues might sustain an independent Kurdistan, along with a Shia state, and a Sunni state (though the Sunnis don't have much oil, at least among the known Iraqi reserves). The law sets up a system that opens the door for foreign companies to make the country's oil policy. A new federal Oil and Gas Council is to assist the Council of Ministers, "in coordination with the producing provinces and regions." This council is to include the prime minister and other cabinet members, directors of the central bank, representatives from the various regions, and "executive managers from important related petroleum companies, including the national Iraqi oil company and the oil marketing company."
Thanks to Raed Jarrar, you can read an English translation of the new law at Al-Ghad, the "voice of the democratic left in Iraq."
The main opposition to the proposal comes from the federation of Iraq oil unions, whose president, Hasan Jum`ah `Awwad al-Asadi, Head of the Federation of Oil Unions, said in a February 6 speech that "We strongly warn all the foreign companies and foreign capital in the form of American companies against coming into our lands under the guise of production-sharing agreements."
Al-Asadi called the law "unbalanced," arguing that "it has been drafted in a great rush in harsh circumstances" and would set "region against region." Other opponents of the deal have formed a coalition led by the London-based group Platform.
While the deal, on its face, splits up control of Iraq's oil among Kurds, Shia and Sunnis, the real power remains in the hands of international companies that will craft contracts with Iraq's regional entities and put up most or all of the money for exploration, development of infrastructure, and actual production, primarily through financial devices known as production sharing agreements. These agreements, which are not widely used in the industry, typically involve a public and a private partner, and stipulate that oil revenue will first go to the private partner to cover expenses and exploration costs. In Iraq, those costs are likely to be considerable since the industrial infrastructure will have to be rebuilt in many areas and much of the country's oil has not yet been mapped. Arguments between the parties will be settled by tribunals outside Iraq.
The new law would give the international companies the right to set the rates of production of each oil field. These fields are immense; a single one can account for 10 percent of the nation's budget.
"Sovereignty is surrendered with this law," Ewa Jasiecz of Platform, the London-based group that has followed the evolution of the new law, tells Mother Jones from London. "Their dealings are secretive, in English. Disputes will be settled by international tribunals in Paris or Geneva. They operate outside Iraqi law." (Platform has published an extensive critique of Iraqi oil politics here.)
Iraq currently has the second or third largest known oil reserves in the world; once completely mapped, it may turn out to have the largest reserves, period. These reserves will become more important over time because Saudi Arabia's reserves are now widely believed to have been overstated, and are in any case beginning to decline. In that context, private control of oil in Iraq — not a member of OPEC — also presents a serious challenge to whatever control OPEC still has over prices and production. People who say the United States lost the war are missing an important point. The oil companies may well be winning.
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I knew the war in Iraq was about oil for corporate giants. It is so very sad that many Americans and Iraqs had to die for the greed of a few. The Legislative Branch and the Courts refused or failed to stop this tradedy.
The poor in both countries are the losers and the 1% wealthest people in the US destroyed both countries in the process. I have learned two things from this, capitalism doesn't work. We, like India live in a caste system and the protestant work ethic is a sham. The greed of the rich destroy the lives of the people in this country as well as other nations.
Yes, this war was always about oil. And ll of the tough talk about Iran is much of the same - oil.
The War and now the occupation of Irag has always been about the oil. We sacrificed our soldiers for corporate profit. No need for any effort to reduce our dependence on foreign oil, and if you think that by letting the oil companies take their oil that the price we pay for gas will go down; think again. The corporations OWN our government and if we want to take it back we will have to fight for it.
It's not even an argument; it's fact.
That the rich relentlessly mobilize the poor to their own ends is not arguable, but how to outsmart them at their own game is.
http://www.globalpolicy.org/security/oil/2003/2003companiesiniraq.htm
Did anyone ever doubt that this was the sole reason for the invasion of Iraq? If you didn't....shame on you!!!
Some how,in someway,this must be stopped,this is more of George Bush's Genocide against the people of Iraq,and it does not matter to him,or anyone in his administration how many die for oil.
These people must be stopped.
One thing seems pretty sure: that the oil
will see to it to keep the oil price as
high as possible. It might even rise to
$100 sooner or later. The high oil price
has even been "positivized" at the stock
exchanges, no talk about inflation in that case anymore, rather high oil prices are seen as good, falling ones
are a desaster (if one follows the stock
news).
That leaves another in the game increasingly out in the cold: Rupert
Murdoch and his News Corps., who promised in 2003: "The greatest thing to come out of this (the war) for the world economy, if you could put it that way, would be $20 a barrel for oil. That's bigger than any tax cut in the any country." Full article in the Guardian:
http://www.guardian.co.uk/Iraq/Story/0,,893378,00.html
Teh way things are going, it seems ever
more unlikely that Murdoch can fulfill
his promise to the world economy a barrel for $20.
Interesting is that the high gasoline
prices didn't go down well at all among
many of the right (News Corps media
consumers). There were even incidents of
quarrels and fights with gasoline station attendants.
It is an almost save bet to predict some
more of such quarrels and fights at gasonline stations in case prices rise,
there might be even riots from among
News corps devoted media consumers in the future in case things get bad enough
for them.
Challenging times, in other words for
media strategists, spin doctors and how
to appease those "hooligans'.
Not only is Iraq a founder member of OPEC, the organization was in fact founded in Baghdad in 1962.
Reduce your consumption of oil!!, it's very clear. Let's change the whole thing from the base. Cut on oil based products. Ride a bicycle, shop locally, grow your own veggies, be sharp, buy products that are not produced by giant corporations. Reduce your demands on the Earth, the environment, cut down on consuming. These are concrete things each of us can do, can you do it?!, I'm doing it and many other people are also doing it. This is important, change will never come from the top, but we can change from our level, then hope is possible, not a dream. How many of us a really ready to confront our selves and our consumption of oil based products?, this is where it begins and ends. Please take action, the people of Iraq will be grateful.
It just makes me sick to my stomach, and there's not a damn thing I can do about it, unless we all get together on this. Pitiful.
This information should be front page news. All the cost of the war should be paid by the oil companies and other corporate war profiteers. The money paid by citizens returned to them and locked down into a special superfund. All countries should get their fair share of the returned money. Then we must deal with the lies that put us into Iraq and prosecute those that committed unlawful crimes.But most importantly is to let the public know what's going on and do it quickly. How many more must die for oil? It is our duty to expose the truth so real democracy can start to return.
Bush and all of those involved in his administration are criminals, they should be tried in tribunal courts for crimes against humanity. Ditto for all of the "unbiased" anchors at Fox News.
It scares me they were able to get away with this.
I agree with James 100%. We have to do something and his plan sounds like a good one for a start.
Blood money, pure and simple. Our soldiers and this nation were sold a bill of goods, and then made to pay for this disgraceful war in so many ways so that Bush and his cronies can go laughing all the way to the bank once his 2nd stolen term is over. Oh the shame!
The war just about oil?NOOOOOO!You mean it wasn't about W(eapons) of M(ass) D(istraction){I mean destruction}?Not about 9/11?Not about liberating Iraq from tyranny???
what da hell is goinq on in this world:: we all need to get along & make up:: god damn:: we are alll god people ((ass holes ))
We all have a lot to learn if we want to create the power of change.
J. George Clark above is right. Every person needs to reduce their oil use.
I believe the Bush Administration took America into this war because they know global oil reserves are declining, and they believed we needed to secure Iraq's oil to sustain our economy. They understand that there is no plan - at all - to sustain our economy without cheap abundant oil.
J. George Clark's recommendations are a great start. But we also need to scale back our consumerism, separate our egos from our SUVs and our homes, and contribute some of our money to the development of alternative energy sources. For you CEO types, America can make BILLIONS, maybe TRILLIONS off those new energy sources and their delivery systems.
And we can take away the most fundamental resource of future immoral wars: We can tell our chidlren, our brothers, our sisters, and our friends NOT TO ENLIST IN THE MILITARY. Find another job!
I do not believe they could have done this if the war required a military Draft. I do not believe they would have gotten the required support. This war was only possible because our standing all-volunteer military is under the command of the Commander in Chief.
Read about Peak Oil. Global reserves are declining. We need to develop nation-wide new energy sources.
America's should decide to dominate those profitable markets!
Iran is about oil in a different way: we must neutralize or destroy Iran before we attack Saudi Arabia and the Emirates because an Iran with missiles and submarines coming in on the side of the Saudis and the Emirates could cause us much grief before we managed to finish off the arab's oil fields.
Iran is also another avenue for the delivery of Caspian oil to the Arabian Sea, and we can't have them getting in on that bonanza either; as you doubtless know (but won't mention according to Greenspan) even our invasion of Afghanistan had nothing to do with bin Laden and everything to do with Caspian oil pipelines.
Hey!! Whatever happened to the billion dollar taxpayer bailout of the oil companies keeping them from bankruptcy. Hey I think its payback time. Oh! while we are on the subject where's the 28 billion dollars unaccounted for from Halleburton!! Plus their profits have soared well above 200% Why has this been forgaotten about when our nation so desperately needs every penny it can get?
This has always been a corporate war. Oh, remember that these companies will not pay income taxes because they have deposited their monies in Off-Shore accounts. "not taxable". In my book, this is TREASON!
Hey Sam Snedegar,you're an idiot (idiotus is someone who refuses to contribute to the common good;) if you think it's a good idea to attack Iran,
why don't you do it yourself coward! Stop supporting policies that I have to pay for. This Government has proven it's incapable of anything but murder, perhaps you should be even more trusting, and join your local military or something; I'm simply tired of paying for Bush's crap, and your's.
For oil, Tikrit's goit it. Plenty. Question: Where does it happen to be going these days. (the crude, pushing $100/barell), if you can get it.
F'not for your blog...
thank you. i have found my e-voice.
Would you happen to remember way back in the early days of the Iraq deal, that some important big pipelies coming out of the superloaded Tikrit oilfields was (or were- get used to my grammar and spelling - [I speak 4 human languages] Iraqi oilfield pipes and pumping stations were totaled violently by insurrectile explosive devices. Remember? Please don't say 'We didn't knoow....' to me, because everybody 'knows' that the Oil-for-Liberation 'deal' in Iraq was ostensably blown up in the early days by the insurrectors. Rigyht? Well...?
How many years would you suppos that Great Power takes to fix oil pipelies?
Four?
Question again. Whazzup with Iraqi oil production [drillilng, shipp[ing, refining, piping, tanking, truking to [where, here!!@?##??, to pay for reconstruction after fininshing bl0owing up].
Show me, [...and the Bushies, not to mention our good friends the Saudis]
the oil. [revenues]
Duh. Wheredit go?
-Dad John [aka Getusedtoit]
Hey Troy! Long time no see. [Best to you and your whole family. [codedredacted].
How Snedegar got this way? Triangulating faseis[t]taving measures between Saigon and Dunkirk?
Any edu MMMight help. Glad to read so many Jonesesblogers have head screwed forwardsly.
Persevere. -jb
yeah. oil is in short supply. so what. Of couse yer right. Juist what i say, " Let them commuters burn up all the fossil fuel in their g**Md internal combustion engines just to take the money and run out of town at rush hour, becaus we need fo bleed to save these commuters' roadratracvecommuterpoluta, just to sayt hthat its ok for the ride? to Where? a PinkSkins game? Joyride? Get home bevoer HapiHr ends? Don't like Metro? Dont rub elbows with unwashed masses?
The Saudis ()not to mention the Tikritis [ ed... Where's tehe Owellwelz? (Where is the crude, dude? _) And otheres who have enoguh crude iol (and russians, btw) to last for 12 generations and 150 wars incvluding the Mother of All Battles, the Battle of Baghdad)(, before we even think of 1) dog stay on porch, 2)get a gasguzzling pimpmobile [not - re: J. Seinfeld (Jerry), or, 3) fight to death.
Huh? Talkenatcha.
-DJ
My subscription will expire in 2008. I will not renew as long as you advertise American Spirit tobacco. Why do want to throw away your integrity and become a lackey to the tobacco industry? Too bad! Count me out.Thanks.
I knew all along this war was about oil and now we all know what our kids are dieing for and others left with life long illness and some will have to taken care of the rest of their lives. This president should be sent to jail for the rest of his life. If Iraq goes for this deal America will end owning Iraq what a sham.
In the movie "Shooter", the senator from Montana tells Bobby Lee Swaggart, the Shooter, that "there are no Democrats or Republicans just haves and have-nots" and proceeds to aske him, the Shooter, on which side does he wish to be. This is one of the most telling scenes of the film. However, is it not Henry Kessinger who supposedly stated that "soldiers are the cannon fodder of politicians". Unfortunately, the "war" in Iraq and the law passed by the Iraqi parliament that will literally divide Iraq into "spheres of Influence" controlled by US corporate oil giants points to the veracity of Kessingers's statement. Americans and Iraqis have died for no other reason than to enrich those whose arrogance and greed know no bounds. The terrible thing is the number of Americans who still believe in the web of lies and the fasade that were woven to launch the invasion of Irag and who now are also "falling" for the same game and web of lies and deceit as it regards Iran.
Reading this validated for me what I believe the true struggle has always been about. I was unaware of Iraq's unmapped regions,and of Iraq possibly sitting atop the largest reserves in the region. Also I did not know of Saudi Arabia's current oil situation. Now it makes sense to me why Saudi Arabia is considered an ally. They are gambling on the winning horse in this race. Thanks for writing this informative, enlightening article.
Do you drive a car or do you all walk?, We need all the oil we can GET.
Yes i totally agree this is wrong innocent human beings lives being taken by people that can't create them, but rest assure theres one person and only one person that will bring justice and everyone will see whos the real WORLD POWER! GOD
Read the Shock Doctrine by Naomi Klein. Milton Friedman's free trade economy rules the world or will. Her book is amazingly revealing.
It seems that the control of Oil Production is more important than National Sovereignty. Why should Iraq be different-It's that way in all the oil producing Nations including the U.S. When you control Oil Production, you control oil prices. If you do both, you control world energy costs and the world is at your command-I don't think the Oil Business is going to like the U.S. going to alternative energy-That is true Blasphemy against the Oil god Of Energy!
