Those So-Called Oil Contracts in Iraq-Questions Without Answers By JEAN GERARD

Weekend Edition
July 7 / 8, 2007


So-called “oil contracts” have been on the table of the Iraqi Parliament for months, and the fluff of lies printed about them in U..S. media is nauseating.
Every report I have been able to find in the general media has been long on inferences and short on facts. The result is that the average American knows nothing about them, and even those of us who try to follow important policy matters cannot find out more than the simple assertion that there are such things as Production Sharing Agreements, and that their signing is one of the “benchmarks” the US has put up as a requirement for our withdrawal of military forces.

These “contracts” are literally a matter of life and death in Iraq, admitted by Prime Minister Maliki himself to be “the most important law in Iraq.” They are proposals for agreements between the Iraqi government such as it is and the world’s largest energy corporations which will determine for a decade or more just how much oil can be pumped out of which fields by whom and how the enormous profits will be shared.

Traditionally the revenue from these fields has been controlled by the Iraqi government as a state-owned resource. Present proposals will probably reduce the amount of control the Iraqi state maintains, while the oil companies are likely to benefit from Iraq’s present weakness which will force them to sign agreements to their disadvantage. Making agreement on the contracts one of the “benchmarks” for the US military departure from Iraq is a form of arm-twisting pressure, saying, in effect: “If you want us out, sign the proposals!”.

The most recent report in the New York Times (7/3/07) says “Maliki’s Cabinet Approves Oil Law Draft” and goes on to state that this means the Parliament can now begin to debate the proposed contracts. This is touted as “a major sign of progress” and will work “to boost reconciliation between Iraq’s Sunnis and Shiites.” Without stating any particulars at all, the article denigrates the disagreements among Iraqi factions as “bickering” and states that negotiations have been “plagued by squabbling.” Use of such prejudicial words minimizes the importance of the proposals at the same time it tells nothing about what those proposals are.

Whatever figures are given on how oil resources are to be shared, are practically meaningless because they have no context. We are told that Kurds will be allotted l7 of the net revenues after deducting federal government expenditures.” 17 what? How much “net revenue”? How much “federal government expenditures?” And totally excluded from the account what will be the rake-off of the international oil companies?

We are told that the decision in the Cabinet to discuss the proposals was “unanimous.” However, of the 37 members, only 24 were present to vote. The Sunni Iraqi Accordance Front and the Shiite Sadrist movement “boycotted” the meeting. Then the article admits that the “key sticking point” is “who should control lucrative untapped fields.” Such a statement indicates that decisions regarding control of development would be done by “a yet-to-be-established national oil company,” implying (but not clearly stating) that the resources will stay in the hands of the Iraqi government and not be placed in the hands of foreign corporations. One cannot help but wonder who this “yet-to-be-established national oil company” will be, and how easy or difficult it might be to form it and to make it effective in dealing with the powerful oil-hungry foreign energy interests

Rather than pointing out the importance of these agreements to the daily livelihood of the Iraqi people, the article stresses that agreement itself will “help convince the US public and Congress that Iraqi leaders are doing what’s needed to halt the violence.” This, of course, implies that the continuing violence in Iraq is caused by lack of agreement on oil contracts which is not true. Discussions over the details of the proposed contracts are not the cause of the war’s continuing and hence the “need” for US troops to remain. Rather, the US does not want to withdraw till it is assured of control over Iraq’s oil.

Under such a cloud of obfuscation and lack of on-going specific information it is easy for reporters to rely on handouts presenting only the US government’s point of view. The interests of the Iraqi people simply do not matter. And concerned Americans can’t find out enough solid information about what is going on to object.

Yet questions arise: Is it really about the disagreements among Iraqi factions, or disagreements about the amount that foreign companies will be allowed to extract? Is it really “unanimous” when only 2/3 of the members are present to vote? Is it likely that the Kurds, who are 20% of the Iraqi population, will be satisfied with 17 (and is it per cent, or what?) of the oil revenues AFTER deducting federal government expenditures? Judging from our own experience here at home, will “federal government expenditures” have any limit? If so, who will limit them, and how?

Questions, questions and no answers. All the cabinets and parliaments in the world will not make it come out right so long as people of ordinary intelligence are excluded from information about what is really going on behind the scenes.

Jean Gerard lives in Los Osos, California.

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2 thoughts on “Those So-Called Oil Contracts in Iraq-Questions Without Answers By JEAN GERARD

  1. a rough draft…some of the sites for information will follow…

    Before we went into Iraq, a committee called International Tax…(ITIC) held meetings in London and Washington that constructed the resolution subsequently handed to the Iraqis with an ultimatum: pass this as a bill in your government or no more reconstruction funding.

    The resolution has finally come to light which called for ‘privatization’ of Iraqi oil. They were kind enough to supply a map of Iraq with the regions that were to be privatized(this is the word they like to use though ‘colonized’ or ‘corporatized’ might be more fitting).

    About ITIC’s membership: major US and European oil corporation officials plus US and UK government functionaries.

    This may become the most unifying event in the new Iraq. Upon assuming command of the Iraqi occupation by the ‘coalition forces’, Paul Bremmer posted a ruling that no union could be established for governmental positions. In total disregard, the technicians and workers that had kept oil production going in the time of Hussein did just that(the General Union of Oil Employees), and just recently threatened a strike if the resolution for privatization passed as a bill. The AFL/CIO supported the strike and reason for it with action line emails to Congress.

    Iraqi leaders of all factions have become aware of this issue, and without exception are opposed to it. It is an interesting parallel that Russia has payed Shell Oil to leave the Sakahlin Oil Project agreed to back in the 90’s was the same type opportunistic gauging. This happened about 2 weeks ago.

    It noticed just yesterday that Iraq and Iran having held a conference in Tehran concluded with a pipeline contract agreement. It does not look like the Bush/Cheney consortium is going to get their windfall profit after all. I all also noticed that the Iraqi Government is going to be holding an auction for contracts to rebuild Iraqi oil facilities. India and China state held companies are sure to be in the action, as they have been successful in their joint Sudan project.

    For more info check out these sites. It will keep you busy thinking as the Play is about to change Scenes…

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