Timing is everything in the Great Game. Pres. Bush is expected to officially unveil A New Way Forward in Iraq midweek, although advance reviews of the draft Bush Commandments suggest it is Dead on Arrival in Congress as well as the American public.
However, Pres. Bush as Commander in Chief can take action and not ask permission afterward, as the saying goes. The USS Eisenhower carrier group is in place and the choice of Admiral Fallon, experienced in the geopolitics of the tense China Sea, as new chief strategist for the Middle East command, no doubt signals to the Iranians that we dont need boots on the ground to start a war. The Ike Strike group also reminds Iraqis what is at stake on those contracts they are supposed to sign (this week) and ensures that if Israel does attempt air strikes in Iran, that the supply chain is protected. The folly and risk of these escapades is well known. Geopolitics is seldom straightforward, but following the money sheds much light on many threats and military actions. Heres a reminder, sent over by Keith Hudson, of what is at stake. Remember, Iraq had contracts before 2003 that US companies had been excluded from because of the longstanding boycott. Russia and China were the major beneficiaries, France to a lesser degree. But much has changed in three years, and Saddams death ended more than a threat to the supply chain, he took to the grave secrets of past geopolitical deals. And so The Game continues. - kwc How the West will make a killing on Iraqi oil riches By Danny Fortson, Andrew Murray-Watson and Tim Webb, Independent UK, 07 January 2007 Iraq's massive oil reserves, the third-largest in the world, are about to be thrown open for large-scale exploitation by Western oil companies under a controversial law which is expected to come before the Iraqi parliament within days. The US government has been involved in drawing up the law, a draft of which has been seen by The Independent on Sunday. It would give big oil companies such as BP, Shell and Exxon 30-year contracts to extract Iraqi crude and allow the first large-scale operation of foreign oil interests in the country since the industry was nationalised in 1972. The huge potential prizes for Western firms will give ammunition to critics who say the Iraq war was fought for oil. They point to statements such as one from Vice-President Dick Cheney, who said in 1999, while he was still chief executive of the oil services company Halliburton, that the world would need an additional 50 million barrels of oil a day by 2010. "So where is the oil going to come from?... The Middle East, with two-thirds of the world's oil and the lowest cost, is still where the prize ultimately lies," he said. Oil industry executives and analysts say the law, which would permit Western companies to pocket up to three-quarters of profits in the early years, is the only way to get Iraq's oil industry back on its feet after years of sanctions, war and loss of expertise. But it will operate through "production-sharing agreements" (or PSAs) which are highly unusual in the Middle East, where the oil industry in Saudi Arabia and Iran, the world's two largest producers, is state controlled. Opponents say Iraq, where oil accounts for 95% of the economy, is being forced to surrender an unacceptable degree of sovereignty. Proposing the parliamentary motion for war in 2003, Tony Blair denied the "false claim" that "we want to seize" Iraq's oil revenues. He said the money should be put into a trust fund, run by the UN, for the Iraqis, but the idea came to nothing. The same year Colin Powell, then Secretary of State, said: "It cost a great deal of money to prosecute this war. But the oil of the Iraqi people belongs to the Iraqi people; it is their wealth, it will be used for their benefit. So we did not do it for oil." Supporters say the provision allowing oil companies to take up to 75% of the profits will last until they have recouped initial drilling costs. After that, they would collect about 20% of all profits, according to industry sources in Iraq. But that is twice the industry average for such deals. Greg Muttitt, a researcher for Platform, a human rights and environmental group which monitors the oil industry, said Iraq was being asked to pay an enormous price over the next 30 years for its present instability. "They would lose out massively," he said, "because they don't have the capacity at the moment to strike a good deal." Iraq's Deputy Prime Minister, Barham Salih, who chairs the country's oil committee, is expected to unveil the legislation as early as today. "It is a redrawing of the whole Iraqi oil industry [to] a modern standard," said Khaled Salih, spokesman for the Kurdish Regional Government, a party to the negotiations. The Iraqi government hopes to have the law on the books by March. Several major oil companies are said to have sent teams into the country in recent months to lobby for deals ahead of the law, though the big names are considered unlikely to invest until the violence in Iraq abates. James Paul, executive director at the Global Policy Forum, the international government watchdog, said: "It is not an exaggeration to say that the overwhelming majority of the population would be opposed to this. To do it anyway, with minimal discussion within the [Iraqi] parliament is really just pouring more oil on the fire." Vince Cable, the Liberal Democrat Treasury spokesman and a former chief economist at Shell, said it was crucial that any deal would guarantee funds for rebuilding Iraq. "It is absolutely vital that the revenue from the oil industry goes into Iraqi development and is seen to do so," he said. "Although it does make sense to collaborate with foreign investors, it is very important the terms are seen to be fair." http://news.independent.co.uk/world/middle_east/article2132569.ece <http://news.independent.co.uk/world/middle_east/article2132569.ece> Related More details on the draft legislation that could start new warfare in Iraq, despite or because of plans to bring in new Kurdish troops for Baghdad security. Blood and Oil: how the West will profit from Iraqs precious commodity Iraq's sovereign right to manage its own natural resources could also be threatened by the provision in the draft that any disputes with a foreign company must ultimately be settled by international, rather than Iraqi, arbitration. In the July draft obtained by The Independent on Sunday, legislators recognise the controversy over this, annotating the relevant paragraph with the note, "Some countries do not accept arbitration between a commercial enterprise and themselves on the basis of sovereignty of the state." It is not clear whether this clause has been retained in the final draft. Under the chapter entitled "Fiscal Regime", the draft spells out that foreign companies have no restrictions on taking their profits out of the country, and are not subject to any tax when doing this. http://news.independent.co.uk/world/middle_east/article2132574.ece <http://news.independent.co.uk/world/middle_east/article2132574.ece>
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