Iraq’s New Oil Law
In the last couple of weeks, the Iraqi talking heads have come up with a proposal for a new law for the distribution of Iraq’s oil wealth. There was a bunch of saber rattling back and forth and then with the assistence of Amb. Khalilzad the proposal is an inter-ethnic law that would evenly distribute any and all revenue that would be made from the sell of oil. Everybody, according to the framers of the new law will benefit, not one group over another.
For the last couple of weeks I have been talking with friends and posting on discussion forums about this law. I was not enthusiastic about it, for I thought it was a crappy idea. So for two days I researched and read and cussed over everything I could find on the subject on line. My research revealed some interesting things that are not being put into the media reports about the law.
All is not as it appears–only a dufus living under a rock would believe that this law was conceived with the Iraqi people in mind.
THe first thing that jumped out at me was the law would re-establish the Iraqi National Oil Company. This organization was shut down by Sadda, in 1987 when he formed the oil ministry. Saddam shut it down because he saw that Iraq’s oil industry was basically owned by foreigners and then the ministry would be owned by the state, in his case owned and controlled by Saddam. THere is an oil ministry in the present government in Iraq. If the law passes as is, then the control by foreign companies will be in the future. A prediction coming true.
Now the most significant provision, at least in my opinion, is the revival of “Production-Sharing Agreements”. I will bet you are asking, what is it and how does it work? Here it is, it is a oil contract which gives foreign companies first claim on any oil they help Iraq extract from its reserves. These agreements were popular back in the days of the beginning of OPEC to try and stave off any popularity they could possibly garner.
PSAs are an interesting twist of affairs. Even when the oil reserves are nationalized by Iraq, that means the oil will be nominally be controlled by the state. The oil companies and all their glory are guaranteed first rights to Iraq’s oil reserves.
The new Iraqi oil law would allow the regional authorities to enter into PSAs in which the oil companies would be guaranteed up to 70% of the revenues. As well as an unrestricted right to take all profits out of Iraq. They would not have to reinvest in the industry nor the country.
Apparently, since the Bush administration has failed in its attempt to reactivate Iraq’s oil industry. I find it interesting that the president, his guys and the media seem to be pumping this law up, as something good for the people of Iraq. To that I say, CRAP! IT IS CRAP!
I hear all the time that the invasion of Iraq was not about the oil. To that I say YES IT WAS! The first piece of legislation to come out of Iraq in awhile and it would give US oil companies control over the oil in the reserves in Iraq.
Stop telling lies to the American people, we are there to rape the countries of their natural resources. The people of Iraq are of no more concern to Bush than the care of injured vets. It is time to take your head out of your butt and realize what the war is about. Our troops are dying to give multinational companies a free reign over Iraq–DEMOCRACY? Just a smoke screen to make it appear a noble cause.