[WCUSP] Fwd: [pdx] "PSAs? crucial to US control of Iraq's oil

[yvonne simmons]

> By hook or by crook the west will get Iraq's oil.
the US invasion of Iraq boils down to greed as has
been often said Yvonne.
> This column from the December Monthly Review 
> http://www.monthlyreview.org/nfte1206.htm. was
> written before the the 
> Baker-Hamilton report was published. Its
> Recommendation #63 outlines the 
> need for the Bush adminsitration to "assist Iraqi
> leaders to reorganize the 
> national oil industry as a
> commercial enterprise" and to "encourage investment
> in Iraq's oil sector by 
> the international community and by international
> energy companies"
> This is to be done through a US-dictated change in
> the (also US dictated) 
> Iraqi constitution giving foreign oil companies
> precisely those PSAs that MR 
> explains below.
> 
> 
> 
> Notes from the Editors
> 
> In a survey of the Iraqi population, the results of
> which were released last 
> June, 76 percent of those surveyed gave as their
> first choice "to control 
> Iraqi oil" when asked to choose three reasons that
> the United States invaded 
> Iraq. The next most common answers were "to build
> military bases" and "to 
> help Israel." Less than 2 percent picked "to bring
> democracy to Iraq" as 
> their first choice (University of Michigan News
> Service, June 14, 2006 
> [http://www.nsumich.edu], U.S. News & World Report,
> August 17, 2006). In the 
> United States the "blood for oil" explanation for
> the war is regularly 
> scorned by the powers that be, including the
> corporate media. However, there 
> is no way of getting around the fact that nearly all
> questions regarding 
> Iraq return in one way or another to oil.
> 
> How then do we explain Washington's fervent denials
> that the United States 
> has any interest in owning or controlling Iraqi's
> oil? At about the same 
> time that the above-mentioned survey was released,
> President George W. Bush, 
> having just returned from a quick trip to Iraq,
> declared on the White House 
> lawn: "The oil belongs to the Iraqi people. It's
> their asset." Moreover, 
> Iraq's oil reserves were conspicuously excluded from
> the sweeping 
> privatization of the economy introduced by the U.S.
> proconsul Paul Bremer in 
> 2003 and 2004. The United States early on vowed to
> the entire world that all 
> decisions on Iraq's oil would be determined by a
> future democratically 
> elected Iraqi government.
> 
> The truth, however, is that plans have been underway
> for some time, 
> beginning even before the invasion, to ensure U.S.
> and British domination of 
> Iraqi oil. When neoconservatives in the early days
> of the occupation 
> proposed the privatization of oil resources what
> they were referring to was 
> legal ownership of the oil reserves in the ground,
> prior to extraction of 
> the oil. It was this form of privatization that
> Washington adamantly 
> rejected. But private ownership of oil in this sense
> exists in no country of 
> the world except the United States and was never a
> genuine option. The real 
> issues of privatization are not who owns the oil in
> the ground, but who gets 
> the revenue from the oil once it is extracted and
> who controls its 
> development and exploitation.
> 
> Classical oil imperialism in the early decades of
> the twentieth century took 
> the form of long-term concessions that the colonial
> countries and their 
> giant oil companies imposed on the oil-producing
> countries in the periphery. 
> The corporations of the colonial powers took charge
> of the development and 
> exploitation of oil fields and got the revenue from
> the sale of the oil, 
> paying royalties and taxes to the governments of the
> subject states. By the 
> early 1970s, however, most large oil-producing
> states in the third world had 
> managed to break away from this system,
> nationalizing their oil industries. 
> In the nationalized model, which included all major
> oil producers in the 
> Middle East, the development of the oil fields, the
> extraction of the oil, 
> and the selling of it were all in the hands of the
> oil states 
> themselves-although they often entered into various
> technical agreements 
> with foreign oil companies.
> 
> With the old imperial concessions model increasingly
> no longer feasible, 
> Western oil companies and their governments
> concocted a new model called the 
> "production sharing agreement" (PSA). PSAs provide
> political camouflage 
> while embodying the material equivalent of the old
> concessions regime. The 
> oil states appear to retain control, but both the
> revenue stream and 
> decisions on the development of oil fields are under
> the control of the 
> giant oil corporations, which are in a position to
> reap enormous profits 
> from the extraction and sale of the oil in accord
> with these agreements. The 
> future actions of oil states are severely
> constrained under such agreements, 
> since provisions in the PSAs make them immune to the
> passage of any 
> subsequent legislation that might alter the basic
> rules. PSAs grant to 
> corporations exclusive rights to exploit oil
> reserves for decades. Moreover, 
> they allow them to "book" these reserves as assets,
> increasing the total 
> asset value of their companies.
> 
> Although PSAs are not uncommon for small oil
> producing countries with high 
> extraction costs, often involving offshore fields,
> they are non-existent 
> among major Middle East producers, and only cover
> about 12 percent of oil 
> reserves worldwide. Of the seven biggest oil
> exporting countries (including 
> Iraq) only Russia, as a result of the
> Western-dominated shock therapy regime 
> after the collapse of the Soviet Union, has PSAs,
> but these are extremely 
> controversial, costing the state billions of
> dollars, and additional ones 
> are unlikely to be signed (Greg Muttitt, Crude
> Designs: The Rip-Off of Iraq's 
> Oil Wealth [PLATFORM, 2005]
> http://www.carbonweb.org).
> 
> The Iraqi government is required to complete its
> final oil law by the end of 
> this month in accord with an agreement concluded
> with the IMF a year ago. 
> The new draft oil law was written mainly by
> Washington and London and by the 
> representatives of the giant oil corporations. As
> leading British oil 
> industry analyst and critic Greg Muttitt observed in
> Foreign Policy in Focus 
> (http://www.fpif.org, August 28, 2006): "Last month,
> the administration and 
> major oil companies reviewed and commented on a new
> law governing Iraq's 
> crucial oil sector, before it has even been seen by
> the Iraqi parliament" 
> (emphasis added). Although written behind closed
> doors, it is clear that the 
> new draft legislation strongly promotes PSAs. While
> the actual details of 
> the draft legislation are not yet public, in an
> earlier stage of 
> negotiations over the Iraqi oil industry it appeared
> that foreign companies 
> would be given control of all currently undeveloped
> Iraqi oil fields, 
> potentially allocating to global oil corporations
> control over 80 percent or 
> more of Iraq's known oil reserves. For the first
> time in more than three 
> decades, since Iraqi oil was nationalized in 1975
> under Saddam Hussein, 
> foreign firms would gain control of Iraq's oil,
> booking it under their own 
> assets. Given the present occupation, U.S. and
> British firms would obviously 
> be well positioned to obtain the lion's share of
> such contracts.
> 
> 
> 
> 



 
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