Hi All, Enclosed below is some interesting material on the oil control issue.
Jack Smith --------- [More (Secret?) Orders for Al Maliki} http://www.thepeoplesvoice.org/cgi-bin/blogs/voices.php/2007/02/21/p14663 02/21/07 ``Western companies will officially control Iraq's oil soon [New Oil Law Means Victory in Iraq for Bush] by Ahmed Abdullah, Islam Online Nearly four years have passed since the U.S. sent its troops to 'liberate Iraq' through an illegal war, described by most analysts and experts as well as most of Iraqis, as a hidden attempt by the Bush administration, which claimed that reasons for the war was the former Iraqi leader's alleged link to Al Qaeda network and possession of Weapons of Mass Destruction, to lay hands on the country's oil riches. Today, the Iraqi government, under the control of the U.S., is considering a new oil law that would establish a framework for managing Iraq's oil wealth, the third-largest oil reserves in the world. Here Raed Jarrar, an Iraqi blogger and architect, who said he has obtained a copy of the new oil law, discusses the new legislation with Antonia Juhasz, author of "The Bush Agenda: Invading the World One Economy at a Time," where she uncovers the economic gains of the U.S. occupation of Iraq. When asked by Democracy Now's Amy Goodman about how he got a copy of the document and what it says, Mr. Jarrar, the Iraq Project Director for Global Exchange said that the document was leaked by Professor Fouad Al-Ameer and published on a website called al-ghad.org. And then it was leaked to other important websites like niqash.org and other places. There different copies of it. Some are scanned, and others of the original document, but it just hit the internet last week [week 3-12-07]. It said so many things. I don't think we can summarize it this short, because it's a very long document, around thirty pages. But majorly, there are three major points that I think we should talk about. Financially, it legalizes very unfair types of contracts that will put Iraq in very long-term contracts that can go up to thirty-five years and cause the loss of hundreds of billions of dollars from Iraqis for no cause. The second point is concerning Iraq's sovereignty. Iraq will not be capable of controlling the levels -- the limits of production, which means that Iraq cannot be a part of OPEC anymore. And Iraq will have this very complicated institution called the Federal Oil and Gas Council, that will have representatives from the foreign oil companies on the board of it, so representatives from, let's say, ExxonMobil and Shell and British Petroleum will be on the federal board of Iraq approving their own contracts. The Third point is the point about keeping Iraq's unity. The law is seen by many Iraqi analysts as a separation for Iraq fund. The law will authorize all of the regional and small provinces' authorities. It will give them the final say to deal with the oil, instead of giving this final say to central federal government, so it will open the doors for splitting Iraq into three regions or even maybe three states in the very near future. On the other hand, Antonia Juhasz, who was also asked by Amy Goodman about the significance of such law for Western oil companies, said that it "certainly opens the door to U.S. oil companies and the Bush administration winning a very large piece of their objective of going to war in Iraq, at least winning it on paper." The law does almost word for word what was laid out in the Baker-Hamilton recommendation ... which is, at the very basic level, to turn Iraq's nationalized oil system, the model that 90% of the world's oil is governed by, take its nationalized oil system and turn it into a commercial system fully open to foreign corporate investment on terms as of yet to be decided. So it leaves vague this very important question of what type of contracts will the Iraqi government use. But what it leaves clear is that basically every level of the oil industry will be open to private foreign companies. <i>[A joke: What is the definition of a democracy in the Middle East? Answer: A government that gives control of its oil fields to the U. S. by "legal" contract.]</i> It introduces this very unique model, which is that ultimate decision making on contracts rests with a new council to be set up in Iraq, and sitting on that council will be representatives -- executives, in fact -- of oil companies, both foreign and domestic. In addition, it does maintain the Iraq National Oil Company, but gives the Iraq National Oil Company almost no preference. It's almost in all cases just another oil company among lots of other companies, including U.S. oil companies. And this council, the new oil and gas council, is going to be the decision making body to determine what kind of contract the Iraqis can sign, and all contract models are still on the table, yet to be determined. I think that's left vague or open, so that the very necessary criticism to earlier drafts of the law, which included specifically production sharing agreements, might be quieted. But the law definitely sets up a very dangerous setup for Iraq's future economic stability, economic development, and certainly sets the stage for a tremendous amount of increased hostility and violence to U.S. soldiers positioned on the ground, as being seen as the implementers of this oil hijack. Asked about the advocates' argument for Western company involvement, that they need to come into Iraq to kick-start the oil development, Juhasz said that Iraq's oil development has actually been going quite well since the invasion under the guidance of the Iraqis themselves. Prior to the war, Iraq produced 2.5 million barrels of oil a day. Since the war, it's been producing about 2.2 million barrels of oil a day. That's definitely dropped most recently, because of the intense violence in Iraq of late. And there have definitely been targeted actions against the oil system as demonstrations of opposition to the occupation. So I believe there is a very concrete argument that can be made that the best thing that Iraq can do right now to see its oil infrastructure secure and pumping at a reasonable level is to see the U.S. occupation end. Given that Iraq's oil only costs less than a dollar per barrel to pump and oil is selling at over $50 per barrel, the Iraqis are already making a tremendous return on their oil. The danger is that under the different models of oil contract that are being put on the table, that the Iraqis would lose the vast majority of that profit to the foreign oil companies. Now, just really quickly, Iraqis have lost a fair amount of expertise, technical know-how, as technology has increased over the past eleven years and the Iraqis were shut out because of the sanctions. The answer to that is found in the models put forward by their neighbors, Kuwait and Saudi Arabia and Iran, which are technical service contracts that countries sign with foreign companies to bring in that expertise, but under very limited time frames and very specific economic benefits to the companies and to the country, not these 35-year contracts, as Raed said, and the potential for vast profits leaving the country. "No one in Iraq knows about the law," said Raed Jarrar. The law has been kept in a very low profile, and there is a huge propaganda campaign by the government trying to portray the law as straight and good for Iraq, a law that will turn Iraq into heaven on earth, because it will bring all of the foreign investments. Even parliamentarians in the Iraqi government, the ones who will have the final say to pass this law, haven't received a copy of this law yet. I sent them the copy three or four days ago, and I sent a copy to many of the other Iraqi bloggers and journalists, because I think it's very important to raise awareness about this and make it an issue. The Iraqi government and the Bush administration are trying to keep a very low profile in Iraq on this law. I think they're planning just to, you know, surprise the parliamentarians one morning and have them vote on it without any knowledge of what the law actually causes.'' Ahmed Abdullah ---------------- http://www.slate.com/id/2161719/ Third Man By Daniel Politi Posted Tuesday, March 13, 2007, at 5:44 AM ET ``In an op-ed piece in the NEW YORKT, Antonia Juhasz says the big winners of the Iraqi oil law that is currently under discussion would be the international oil companies. The law would allow companies to take control of much of Iraq's oil "for a generation or more," and there are no requirements for any of the earnings to be invested back into Iraq. Juhasz also suggests that companies could take advantage of the current violence in Iraq to sign contracts now when the "government is at its weakest and then wait at least two years before setting foot in the country." ---------------- http://www.nytimes.com/2007/03/13/opinion/13juhasz.html'_r=1&oref=slogin Op-Ed Contributor ``Whose Oil Is It, Anyway? By ANTONIA JUHASZ Published: March 13, 2007 San Francisco Jacob Magraw-Mickelson TODAY more than three-quarters of the world's oil is owned and controlled by governments. It wasn't always this way. Until about 35 years ago, the world's oil was largely in the hands of seven corporations based in the United States and Europe. Those seven have since merged into four: ExxonMobil, Chevron, Shell and BP. They are among the world's largest and most powerful financial empires. But ever since they lost their exclusive control of the oil to the governments, the companies have been trying to get it back. Iraq's oil reserves ' thought to be the second largest in the world ' have always been high on the corporate wish list. In 1998, Kenneth Derr, then chief executive of Chevron, told a San Francisco audience, 'Iraq possesses huge reserves of oil and gas ' reserves I'd love Chevron to have access to.' A new oil law set to go before the Iraqi Parliament this month would, if passed, go a long way toward helping the oil companies achieve their goal. The Iraq hydrocarbon law would take the majority of Iraq's oil out of the exclusive hands of the Iraqi government and open it to international oil companies for a generation or more. In March 2001, the National Energy Policy Development Group (better known as Vice President Dick Cheney's energy task force), which included executives of America's largest energy companies, recommended that the United States government support initiatives by Middle Eastern countries 'to open up areas of their energy sectors to foreign investment.' One invasion and a great deal of political engineering by the Bush administration later, this is exactly what the proposed Iraq oil law would achieve. It does so to the benefit of the companies, but to the great detriment of Iraq's economy, democracy and sovereignty. Since the invasion of Iraq, the Bush administration has been aggressive in shepherding the oil law toward passage. It is one of the president's benchmarks for the government of Prime Minister Nuri Kamal al-Maliki, a fact that Mr. Bush, Secretary of State Condoleezza Rice, Gen. William Casey, Ambassador Zalmay Khalilzad and other administration officials are publicly emphasizing with increasing urgency. The administration has highlighted the law's revenue sharing plan, under which the central government would distribute oil revenues throughout the nation on a per capita basis. But the benefits of this excellent proposal are radically undercut by the law's many other provisions -- these allow much (if not most) of Iraq's oil revenues to flow out of the country and into the pockets of international oil companies. The law would transform Iraq's oil industry from a nationalized model closed to American oil companies except for limited (although highly lucrative) marketing contracts, into a commercial industry, all-but-privatized, that is fully open to all international oil companies. The Iraq National Oil Company would have exclusive control of just 17 of Iraq's 80 known oil fields, leaving two-thirds of known ' and all of its as yet undiscovered ' fields open to foreign control. The foreign companies would not have to invest their earnings in the Iraqi economy, partner with Iraqi companies, hire Iraqi workers or share new technologies. They could even ride out Iraq's current 'instability' by signing contracts now, while the Iraqi government is at its weakest, and then wait at least two years before even setting foot in the country. The vast majority of Iraq's oil would then be left underground for at least two years rather than being used for the country's economic development. The international oil companies could also be offered some of the most corporate-friendly contracts in the world, including what are called production sharing agreements. These agreements are the oil industry's preferred model, but are roundly rejected by all the top oil producing countries in the Middle East because they grant long-term contracts (20 to 35 years in the case of Iraq's draft law) and greater control, ownership and profits to the companies than other models. In fact, they are used for only approximately 12 percent of the world's oil. Iraq's neighbors Iran, Kuwait and Saudi Arabia maintain nationalized oil systems and have outlawed foreign control over oil development. They all hire international oil companies as contractors to provide specific services as needed, for a limited duration, and without giving the foreign company any direct interest in the oil produced. Iraqis may very well choose to use the expertise and experience of international oil companies. They are most likely to do so in a manner that best serves their own needs if they are freed from the tremendous external pressure being exercised by the Bush administration, the oil corporations ' and the presence of 140,000 members of the American military. Iraq's five trade union federations, representing hundreds of thousands of workers, released a statement opposing the law and rejecting 'the handing of control over oil to foreign companies, which would undermine the sovereignty of the state and the dignity of the Iraqi people.' They ask for more time, less pressure and a chance at the democracy they have been promised. Antonia Juhasz, an analyst with Oil Change International, a watchdog group, is the author of 'The Bush Agenda: Invading the World, One Economy at a Time.''' ---------------- http://dg.specificclick.net/jensondemo/smServlet?u=http%3A//www.huffingtonpost.com/robert-naiman/kucinich-seeks-to-strip-o_b_43398.html&r=http%3A//news.google.com/news%3Fclient%3Dopera%26rls%3Den%26q%3DAntonia%2520Juhasz%26sourceid%3Dopera%26ie%3DUTF-8%26oe%3DUTF-8%26um%3D1%26sa%3DN%26tab%3Dwn Huffington Post, NEW YORK March 14, 2007 ``Kucinich Seeks to Strip Oil Law Benchmark from Supplemental [Appropriation] In a letter to fellow Members of Congress, Representative Dennis Kucinich writes: "The primary function of the oil law currently being considered by the Iraqi government will be to open Iraqi oil fields to private foreign companies, depriving the Iraqi people of a necessary source of national income." Kucinich has announced his intention to offer an amendment on the floor to strip out the oil law benchmark from the supplemental [appropriation]. It's quite plausible that with a little public attention and lobbying, this amendment could pass. It also offers an opportunity for labor unions, anti-privatization and global justice activists to jump into the Congressional debate. Of course, it's up to the Iraqis to decide what kind of system they want to have for controlling their oil wealth. The point is that they are currently being pressed to accept an IMF regime designed by foreign consultants for the benefit of multinational companies while they are under foreign military occupation. Thus, you don't have to be "anti-privatization" or even anti-war to support the Kucinich amendment. You just have to be pro-democracy ...'' www.justforeignpolicy.org
