Blood and oil: How the West will profit from Iraq's most precious commodity

[babylonsister]

http://news.independent.co.uk/world/middle_east/article2132574.ece

9 August 2007 15:52
Blood and oil: How the West will profit from Iraq's most precious commodity
The 'IoS' today reveals a draft for a new law that would give Western oil companies a massive share in the third largest reserves in the world. To the victors, the oil? That is how some experts view this unprecedented arrangement with a major Middle East oil producer that guarantees investors huge profits for the next 30 years
Published: 07 January 2007

So was this what the Iraq war was fought for, after all? As the number of US soldiers killed since the invasion rises past the 3,000 mark, and President George Bush gambles on sending in up to 30,000 more troops, The Independent on Sunday has learnt that the Iraqi government is about to push through a law giving Western oil companies the right to exploit the country's massive oil reserves.

And Iraq's oil reserves, the third largest in the world, with an estimated 115 billion barrels waiting to be extracted, are a prize worth having. As Vice-President Dick Cheney noted in 1999, when he was still running Halliburton, an oil services company, the Middle East is the key to preventing the world running out of oil.

Now, unnoticed by most amid the furore over civil war in Iraq and the hanging of Saddam Hussein, the new oil law has quietly been going through several drafts, and is now on the point of being presented to the cabinet and then the parliament in Baghdad. Its provisions are a radical departure from the norm for developing countries: under a system known as "production-sharing agreements", or PSAs, oil majors such as BP and Shell in Britain, and Exxon and Chevron in the US, would be able to sign deals of up to 30 years to extract Iraq's oil.

PSAs allow a country to retain legal ownership of its oil, but gives a share of profits to the international companies that invest in infrastructure and operation of the wells, pipelines and refineries. Their introduction would be a first for a major Middle Eastern oil producer. Saudi Arabia and Iran, the world's number one and two oil exporters, both tightly control their industries through state-owned companies with no appreciable foreign collaboration, as do most members of the Organisation of Petroleum Exporting Countries, Opec.

Critics fear that given Iraq's weak bargaining position, it could get locked in now to deals on bad terms for decades to come. "Iraq would end up with the worst possible outcome," said Greg Muttitt of Platform, a human rights and environmental group that monitors the oil industry. He said the new legislation was drafted with the assistance of BearingPoint, an American consultancy firm hired by the US government, which had a representative working in the American embassy in Baghdad for several months.

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http://news.independent.co.uk/world/middle_east/article2132574.ece

[aquart]

1. We won't profit.

China will. They'll wait till we're completely exhausted and then walk in without firing a shot and get contracts written for every drop.

We're half-dead now. It won't be that long.

[MasonJar]

2. It is dishonorable to steal the Iraqis' oil for Exxon. I refuse for the USA

to do this. Cheney and Bush win if that happens. We must rise up against this chicanery and greed. I am sick of the whole stinking lot of them.....the Bushistas and the oil companies and the pharmaceuticals and the insurance barons. Why should Americans support their ploys; it just emboldens them to take advantage of us here at home too. But regardless I do not believe in theft and that is what this oil law is. Now we know why Tony was so adamant to support the Stump.

[babylonsister]

3. I agree with everything you said, and wish we could actually do somethiing

about all of it.:-(

[Briar]

4. So was this what the Iraq war was fought for, after all?

Of course it was. Why are articles like this still being written as if it were some stunning revelation? We knew all this back in 2003! US politicians of both parties are always absolutely frank in admitting that US foreign policy is predicated exclusively to serve US interests, and stuff whoever gets in the way. Anyone who believed the "spreading democracy" blether was simply taken in by a crude and obvious con designed to justify what has followed: the blatant flouting of international law and subverting of the UN, and the total betrayal of the Iraqi people. The US may have its hands on the oil, but the world is much less safe now that "might makes right" has prevailed over the courageous post WW2 effort to impose a rule of law that would protect everyone from the predations of rich and powerful countries.

[dipsydoodle]

5. PSAs allow a country to retain legal ownership of its oil

but gives a share of profits to the international companies that invest in infrastructure and operation of the wells, pipelines and refineries.

Big deal - all the oil companies need to do then is leave the fucking stuff in the ground as a future reserve. Iraq is thus screwed because they can't then allow anyone else to drill for it because of the PSA agreements.

The Iraqis are waking up to this and I doubt the law will ever be passed - not peacefully anyway.

[Prophet 451]

6. Doesn't matter

Sooner or later, the US is going to have to either pull out of Iraq or be forced out. As soon as that happens, the country (in all liklihood) collapses into full-blown, uncontained civil war. Whichever faction wins that (or if, by some miracle, it's avoided) will almost certainly declare the contracts illegal (and legally, they'd be right for numerous reasons) and re-nationalise Iraq's oil industry.

Oh, the oil companies will bitch and moan about it but they can't invade Iraq themselves (not without lots of merceneries and let's hope they don't figure that out) and I seriously doubt the US government (because I will bet most of the oil companies are based in the US) will want to get involved in Iraq for a third time.