Dividing up Iraqi Oil

Kurds Get Piece of Oil Wealth; Foreign Investment Questions Linger

While pressure on the Baghdad government mounted, Iraqi oil unions staged protests in early June. Many Iraqis believe the measure would drive the oil industry toward privatization and unfairly benefit outside oil companies.

“We think the proposed oil law doesn’t serve the interests of the Iraqi people at all,” said Faleh Abood Umara, general secretary of the Southern Oil Company Union and the Iraqi Federation of Oil Workers’ Unions, at a news conference in New York on June 18. “It emphasizes or confirms American hegemony over Iraqi oil fields.”

The unions have said they worry negotiations could result in a law that would give foreign companies too much influence. But details of how foreign investors would be involved are still being nailed down, said David Pumphrey, deputy director of the energy program at the Center for Strategic and International Studies. …

… Foreign oil companies, meanwhile, are waiting for the oil law to provide a structure in which to operate in the country. The law was intended to build confidence in the stability of the system and provide incentives to work in a still violent region.

“This is an industry that makes very long decisions. They reap their profits over a period of decades, and it takes years to develop projects,” Greg Priddy, an energy analyst at the Eurasia Group, told the NewsHour in May.

“They need to be confident that it’s going to be stable, not just the next few years, but out 30 years or so, way beyond the U.S. occupation.”

We knew this was about oil, this just documents it.

3 Comments

CabinGirl on June 23, 2007 at 9:49 am

Back in 2005, I was talking to a man from Mosul who was complaining that the US should have just been upfront about the role oil played in the war. Everyone knew it, why lie about it? He felt that approach would have resulted in more widespread support and a better outcome for Iraq than the false WMD story.

I don’t know if that’s the case, but it was interesting to hear an Iraqi point of view at the time. I wonder what he would have to say today?

AliceDem on June 23, 2007 at 1:07 pm

In March of 2003 most Americans thought Hussein had something to do with 9/11. The vast majority of Americans believed Iraq’s WMD were an eminent threat to their safety, otherwise support for the war would have evaporated. As it was there was considerable anti-war sentiment at the time of the original invasion.

Had the cry gone out, hey, let’s grab Iraq’s oil, people would have said, no, let’s get bin Laden.

Even now, people are only dimly aware of the role of the production sharing agreements in prolonging our involvement in this war. That is why I posted this.

Connecticut Man1 on June 24, 2007 at 10:40 am

A little quoted article from the 2006 LA Times:

ISG Concludes that IRAQ = OIL

What can you say about an article like this?

It’s still about oil in Iraq – Los Angeles Times:

A centerpiece of the Iraq Study Group’s report is its advocacy for securing foreign companies’ long-term access to Iraqi oil fields.

WHILE THE Bush administration, the media and nearly all the Democrats still refuse to explain the war in Iraq in terms of oil, the ever-pragmatic members of the Iraq Study Group share no such reticence.

Page 1, Chapter 1 of the Iraq Study Group report lays out Iraq’s importance to its region, the U.S. and the world with this reminder: “It has the world’s second-largest known oil reserves.” The group then proceeds to give very specific and radical recommendations as to what the United States should do to secure those reserves. If the proposals are followed, Iraq’s national oil industry will be commercialized and opened to foreign firms.

The report makes visible to everyone the elephant in the room: that we are fighting, killing and dying in a war for oil. It states in plain language that the U.S. government should use every tool at its disposal to ensure that American oil interests and those of its corporations are met.

It’s spelled out in Recommendation No. 63, which calls on the U.S. to “assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise” and to “encourage investment in Iraq’s oil sector by the international community and by international energy companies.” This recommendation would turn Iraq’s nationalized oil industry into a commercial entity that could be partly or fully privatized by foreign firms.”

I guess that is what they mean when they say the ISG was made up of “moderate and bipartisan” elderly statesmen. It means they will shill for the oil industries too.

The U.S. State Department’s Oil and Energy Working Group, meeting between December 2002 and April 2003, also said that Iraq “should be opened to international oil companies as quickly as possible after the war.” Its preferred method of privatization was a form of oil contract called a production-sharing agreement. These agreements are preferred by the oil industry but rejected by all the top oil producers in the Middle East because they grant greater control and more profits to the companies than the governments. The Heritage Foundation also released a report in March 2003 calling for the full privatization of Iraq’s oil sector. One representative of the foundation, Edwin Meese III, is a member of the Iraq Study Group. Another, James J. Carafano, assisted in the study group’s work.

For any degree of oil privatization to take place, and for it to apply to all the country’s oil fields, Iraq has to amend its constitution and pass a new national oil law. The constitution is ambiguous as to whether control over future revenues from as-yet-undeveloped oil fields should be shared among its provinces or held and distributed by the central government.

This is a crucial issue, with trillions of dollars at stake, because only 17 of Iraq’s 80 known oil fields have been developed. Recommendation No. 26 of the Iraq Study Group calls for a review of the constitution to be “pursued on an urgent basis.” Recommendation No. 28 calls for putting control of Iraq’s oil revenues in the hands of the central government. Recommendation No. 63 also calls on the U.S. government to “provide technical assistance to the Iraqi government to prepare a draft oil law.”

Go read the entire article and then be sick to your stomachs…

It has always been about the big oil companies getting their slice of the pie… And that appears to be one of the few truly bipartisan efforts on Capitol Hill.

CabinGirl on June 23, 2007 at 9:49 am

Back in 2005, I was talking to a man from Mosul who was complaining that the US should have just been upfront about the role oil played in the war. Everyone knew it, why lie about it? He felt that approach would have resulted in more widespread support and a better outcome for Iraq than the false WMD story.

I don’t know if that’s the case, but it was interesting to hear an Iraqi point of view at the time. I wonder what he would have to say today?
- AliceDem on June 23, 2007 at 1:07 pm
  
  In March of 2003 most Americans thought Hussein had something to do with 9/11. The vast majority of Americans believed Iraq’s WMD were an eminent threat to their safety, otherwise support for the war would have evaporated. As it was there was considerable anti-war sentiment at the time of the original invasion.
  
  Had the cry gone out, hey, let’s grab Iraq’s oil, people would have said, no, let’s get bin Laden.
  
  Even now, people are only dimly aware of the role of the production sharing agreements in prolonging our involvement in this war. That is why I posted this.
Connecticut Man1 on June 24, 2007 at 10:40 am

A little quoted article from the 2006 LA Times:

ISG Concludes that IRAQ = OIL

What can you say about an article like this?

It’s still about oil in Iraq – Los Angeles Times:

A centerpiece of the Iraq Study Group’s report is its advocacy for securing foreign companies’ long-term access to Iraqi oil fields.

WHILE THE Bush administration, the media and nearly all the Democrats still refuse to explain the war in Iraq in terms of oil, the ever-pragmatic members of the Iraq Study Group share no such reticence.

Page 1, Chapter 1 of the Iraq Study Group report lays out Iraq’s importance to its region, the U.S. and the world with this reminder: “It has the world’s second-largest known oil reserves.” The group then proceeds to give very specific and radical recommendations as to what the United States should do to secure those reserves. If the proposals are followed, Iraq’s national oil industry will be commercialized and opened to foreign firms.

The report makes visible to everyone the elephant in the room: that we are fighting, killing and dying in a war for oil. It states in plain language that the U.S. government should use every tool at its disposal to ensure that American oil interests and those of its corporations are met.

It’s spelled out in Recommendation No. 63, which calls on the U.S. to “assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise” and to “encourage investment in Iraq’s oil sector by the international community and by international energy companies.” This recommendation would turn Iraq’s nationalized oil industry into a commercial entity that could be partly or fully privatized by foreign firms.”

I guess that is what they mean when they say the ISG was made up of “moderate and bipartisan” elderly statesmen. It means they will shill for the oil industries too.

The U.S. State Department’s Oil and Energy Working Group, meeting between December 2002 and April 2003, also said that Iraq “should be opened to international oil companies as quickly as possible after the war.” Its preferred method of privatization was a form of oil contract called a production-sharing agreement. These agreements are preferred by the oil industry but rejected by all the top oil producers in the Middle East because they grant greater control and more profits to the companies than the governments. The Heritage Foundation also released a report in March 2003 calling for the full privatization of Iraq’s oil sector. One representative of the foundation, Edwin Meese III, is a member of the Iraq Study Group. Another, James J. Carafano, assisted in the study group’s work.

For any degree of oil privatization to take place, and for it to apply to all the country’s oil fields, Iraq has to amend its constitution and pass a new national oil law. The constitution is ambiguous as to whether control over future revenues from as-yet-undeveloped oil fields should be shared among its provinces or held and distributed by the central government.

This is a crucial issue, with trillions of dollars at stake, because only 17 of Iraq’s 80 known oil fields have been developed. Recommendation No. 26 of the Iraq Study Group calls for a review of the constitution to be “pursued on an urgent basis.” Recommendation No. 28 calls for putting control of Iraq’s oil revenues in the hands of the central government. Recommendation No. 63 also calls on the U.S. government to “provide technical assistance to the Iraqi government to prepare a draft oil law.”

Go read the entire article and then be sick to your stomachs…

It has always been about the big oil companies getting their slice of the pie… And that appears to be one of the few truly bipartisan efforts on Capitol Hill.

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