Crude+Designs+on+Iraq,+Helena+Cobban,+Just+World+News


 * From “Just World News”, Helena Cobban’s blog, at http://justworldnews.org/**


 * January 11, 2006 9:13 PM EST**

=Iraqi oil affairs=

The British-based anti-poverty movement War on Want is one of the co-publishers of what looks like a well-done new study of the production sharing agreements that Iraq's American occupiers are trying to develop for Iraq's oil industry. The study is called Crude Designs - The rip-off of Iraq's oil wealth.

A recent press release from War on Want says:

Figures published in the report for the first time show:


 * the estimated cost to Iraq over the life of the new oil contracts is $74 to $194 billion, compared with leaving oil development in public hands. These sums represent between two and seven times the current Iraqi state budget.
 * the contracts would guarantee massive profits to foreign companies, with rates of return of 42% to 162%.

The kinds of contracts that will provide these returns are known as production sharing agreement(PSAs). PSAs have been heavily promoted by the US government and oil majors and have the backing of senior figures in the Iraqi Oil Ministry. Britain has also encouraged Iraq to open its oilfields to foreign investment.

The report's Executive Summary lays out those same facts and further explains:

an oil policy with origins in the US State Department is on course to be adopted in Iraq, soon after the December elections, with no public debate and at enormous potential cost. The policy allocates the majority of Iraq’s oilfields – accounting for at least 64% of the country’s oil reserves – for development by multinational oil companies.

Iraqi public opinion is strongly opposed to handing control over oil development to foreign companies. But with the active involvement of the US and British governments a group of powerful Iraqi politicians and technocrats is pushing for a system of long term contracts with foreign oil companies which will be beyond the reach of Iraqi courts, public scrutiny or democratic control.

... The development model being promoted in Iraq, and supported by key figures in the Oil Ministry, is based on contracts known as production sharing agreements (PSAs), which have existed in the oil industry since the late 1960s. Oil experts agree that their purpose is largely political: technically they keep legal ownership of oil reserves in state hands, while practically delivering oil companies the same results as the concession agreements they replaced.

Running to hundreds of pages of complex legal and financial language and generally subject to commercial confidentiality provisions, PSAs are effectively immune from public scrutiny and lock governments into economic terms that cannot be altered for decades.

In Iraq’s case, these contracts could be signed while the government is new and weak, the security situation dire, and the country still under military occupation. As such the terms are likely to be highly unfavourable, but could persist for up to 40 years.

I don't know much about the strength of the oil workers' trade unions in Iraq right now. But Gilbert Achcar just sent me this text, which is an English-language version of the speech that Hassan Jumaa Awad, the President of the General Union of Oil Employees in Basra, made at the big anti-war gathering in London on Dec. 10.

Awad concluded his speech thus:

America does not want to withdraw at this time, because it did not complete its operation; it has not yet accomplished the second phase of the occupation, the economic occupation of Iraq. That is why the U.S. administration is currently putting forward its economic plans which include privatization of the oil and manufacturing sectors, and the production sharing agreement [PSA] project.

From this platform, I would like to make clear to all the positions of our Union, which are known to the Iraqi people:

1. Occupation forces must leave the country immediately and unconditionally. 2. We will stand firmly and resolutely against all those who want to tamper with the security and power of the Iraqi people. 3. We condemn terrorist attacks against our people and stress the importance of respecting human rights. 4. We support the honorable resistance that targets and strikes at foreign military forces and seeks to drive the occupiers out. 5. We will not allow the intrusion of foreign companies [in the oil sector] and production sharing agreements, and we will stand with all our force against monopoly firms such as Halliburton, KBR, Shell, and others. 6. We ask the patriotic forces, the antiwar movement and peace-lovers to support our Union in its campaign against privatization and PSAs. 7. We demand the unconditional cancellation of Iraq's [foreign] debts, as these debts never benefited the Iraqi people but served the buried regime.

In conclusion, I wish you good luck and success, and I look forward to meeting you in a free, democratic, and united Iraq that would be a workshop for all free citizens of the world. I offer again my thanks and appreciation to the organizers of this conference.

So anyway, it looks as though the new Iraqi government-- when and if it should ever get formed!-- will have three extremely important items on its agenda:

(1) Completing the still-incomplete negotiations for the Constitution, (2) Negotiating the withdrawal (or otherwise) of the US/UK forces, and (3) Determining the country's oil policy-- an item that looks as if it is going to be forced onto their agenda very early on.

I will just conclude by noting that Iraq's nationalization of its oil industry, which back in 1972 took control of the industry back from its British and other foreign "concessionaires", was an extremely important step forward in the country's history. But now-- here come the same-old colonial powers, back once again.


 * From “Just World News”, Helena Cobban’s blog, at http://justworldnews.org/**