by Philip Thornton
Iraqis face the dire prospect of losing up to $200bn (£116bn) of the wealth
of their country if an American-inspired plan to hand over development of
its oil reserves to US and British multinationals comes into force next
year. A report produced by American and British pressure groups warns Iraq
will be caught in an "old colonial trap" if it allows foreign companies to
take a share of its vast energy reserves. The report is certain to reawaken
fears that the real purpose of the 2003 war on Iraq was to ensure its oil
came under Western control.
The Iraqi government has announced plans to seek foreign investment to
exploit its oil reserves after the general election, which will be held next
month. Iraq has 115 billion barrels of proved oil reserves, the third
largest in the world.
According to the report, from groups including War on Want and the New
Economics Foundation (NEF), the new Iraqi constitution opened the way for
greater foreign investment. Negotiations with oil companies are already
under way ahead of next month's election and before legislation is passed,
it said.
The groups said they had amassed details of high-level pressure from the US
and UK governments on Iraq to look to foreign companies to rebuild its oil
industry. It said a Foreign Office code of practice issued in summer last
year said at least $4bn would be needed to restore production to the levels
before the 1990-91 Gulf War. "Given Iraq's needs it is not realistic to cut
government spending in other areas and Iraq would need to engage with the
international oil companies to provide appropriate levels of foreign direct
investment to do this," it said.
Yesterday's report said the use of production sharing agreements (PSAs) was
proposed by the US State Department before the invasion and adopted by the
Coalition Provisional Authority. "The current government is fast-tracking
the process. It is already negotiating contracts with oil companies in
parallel with the constitutional process, elections and passage of a
Petroleum Law," the report, Crude Designs, said.
Earlier this year a BBC Newsnight report claimed to have uncovered documents
showing the Bush administration made plans to secure Iraqi oil even before
the 9/11 terrorist attacks on the US. . . .
FULL TEXT
---
Enver Masud, "A Clash Between Justice and
Greed, Not Islam and the West," The Wisdom Fund, September 2, 2002
Enver Masud, "New Iraq
Constitution a Pretext for Exploitation," The Wisdom Fund, September 16, 2003
Lutz Kleveman, "The New Great Game,"
Guardian, October 20, 2003
Glenn Frankel, "U.S. Mulled Seizing
Oil Fields In '73," Washington Post, January 1, 2004
Daniel Howden and Philip Thornton, "The
Pipeline That Will Change the World," Independent, May 25, 2005
Francis A. Boyle, "Iraq and the Laws of War,"
International Clearing House, October 14, 2005
VIDEO: "The Oil
Factor: Behind the War on Terror," Democracynow.org, October 22, 2005
[The Kurdistan Democratic Party, which controls a portion of the
semiautonomous Kurdish enclave in northern Iraq, last year quietly signed a
deal with Norway's DNO to drill for oil near the border city of
Zakho.--Borzou Daragahi, "Kurdish Oil Deal Shocks Iraq's
Political Leaders: A Norwegian company begins drilling in the north
without approval from Baghdad," Los Angeles Times, December 1, 2005]
[The country's financial future will instead be dictated by a new colossal
economic occupation, complete with ground forces, tanks, foreign military
bases--Joshua Frank, "Let the Drilling
Begin," CounterPunch.org, December 28, 2005]
[. . . current Iraqi oil policy will allocate the development of at least
64% of Iraq's reserves to foreign oil companies. Iraq has the world's third
largest oil reserves.
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 agreements (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.
However PSAs last for 25-40 years, are usually secret and prevent
governments from later altering the terms of the contract.-- Greg Muttitt,
"Crude Designs: The
Rip-Off of Iraq's Oil Wealth," carbonweb.org, November 2005]
[ . . . a 323-page plan, which was written by big oil, which is the secret
but official plan of the United States for Iraq's oil, written by the big
oil companies out of the James Baker Institute in coordination with a secret
committee of the Council on Foreign Relations. I know it sounds very
conspiratorial, but this is exactly how they do it. It's quite wild. And
it's all about a plan to control Iraq's oil and make sure that Iraq has a
system, which, quote, "enhances its relationship with OPEC." In other words,
the whole idea is to maintain the power of OPEC, which means maintain the
power of Saudi Arabia.Greg Palast, "Armed
Madhouse," democracynow.org, May 15, 2006]
