[WCUSP] Fw: New Iraq Oil Law To Open Iraq's Oil Reserves to Western Companies

[Libby or Mort Frank]

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Sent: Wednesday, February 21, 2007 9:54 PM
Subject: New Iraq Oil Law To Open Iraq's Oil Reserves to Western Companies


> New Iraq Oil Law To Open Iraq's Oil Reserves to Western
> Companies
> 
> Tuesday, February 20th, 2007
> Democracy Now
> http://www.democracynow.org/article.pl?sid=07/02/20/1523250
> 
> The Iraqi blogger Raed Jarrar has obtained a copy of
> the proposed oil law and has just translated it into
> English. He discusses the new law with Antonia Juhasz,
> author of "The Bush Agenda: Invading the World One
> Economy at a Time.' [includes rush transcript]
> 
> In one of the first studies of Iraqi public opinion
> after the US-led invasion of March 2003, the polling
> firm Gallup asked Iraqis their thoughts on the Bush
> administration's motives for going to war. One percent
> of Iraqis said they believed the motive was to
> establish democracy. Slightly more (five percent)
> said to assist the Iraqi people. But far in the lead
> was the answer that got 43 percent - 'to rob Iraq's
> oil.'
> 
> Well, with the four-year mark of the Iraq war less than
> a month away, the answer may come into clearer view.
> After a long negotiation process involving US
> officials, the Iraqi government is considering a new
> oil law that would establish a framework for managing
> the third-largest oil reserves in the world.
> 
> What would this new law mean for Iraq? With me now from
> Washington DC is Raed Jarrar - He is the Iraq Project
> Director for Global Exchange. He has obtained a copy of
> the proposed oil law which he translated from Arabic
> and posted on his website. And Antonia Juhasz is on the
> phone with us -- She has written extensively about the
> economic side of the US occupation of Iraq and is the
> author of the book, 'The Bush Agenda: Invading the
> World One Economy at a Time.' Antonia is a Tarbell
> Fellow at Oil Change International. We welcome you both
> to Democracy Now!
> 
>   * Raed Jarrar Iraq Project Director for Global
>     Exchange. He is an Iraqi blogger and architect. He
>     runs a popular blog called "Raed in the Middle."
> 
>   * Antonia Juhasz, author and activist. She is a
>     Tarbell Fellow at Oil Change International. Her
>     latest book is called "The Bush Agenda: Invading
>     the World, One Econony at a Time."
> 
> -------------------------------------------------------
> ----------------- RUSH TRANSCRIPT
> 
> This transcript is available free of charge. However,
> donations help us provide closed captioning for the
> deaf and hard of hearing on our TV broadcast. Thank you
> for your generous contribution. Donate - $25, $50,
> $100, more...
> 
> AMY GOODMAN: With me now in Washington is Raed Jarrar.
> He is the Iraq Project Director for Global Exchange,
> and he has obtained a copy of the proposed oil law,
> which he translated from Arabic and posted on his
> website, raedinthemiddle.blogspot.com. Antonia Juhasz
> is also with us on the telephone. She has written
> extensively about the economic side of the US
> occupation of Iraq and is author of the book, The Bush
> Agenda: Invading the World One Economy at a Time.
> Antonia is currently a Tarbell Fellow at Oil Change
> International. We welcome you both to Democracy Now!.
> 
> Raed Jarrar, first, how did you get this document?
> 
> RAED JARRAR: The document was leaked by Professor Fouad
> Al-Ameer and published on a website called al-ghad.org.
> And then it was leaked to other important websites like
> niqash.org and other places. There are different ways
> of -- different copies of it. Some of it are scanned,
> and others of the original document, but it just hit
> the internet last week.
> 
> AMY GOODMAN: And explain what it says, now that you've
> finished translating it.
> 
> RAED JARRAR: It said so many things. I don't think we
> can summarize it this short, because it's a very long
> document, around thirty pages. But majorly, there are
> three major points that I think we should talk about.
> Financially, it legalizes very unfair types of
> contracts that will put Iraq in very long-term
> contracts that can go up to thirty-five years and cause
> the loss of hundreds of billions of dollars from Iraqis
> for no cause.
> 
> And the second point is concerning Iraq's sovereignty.
> Iraq will not be capable of controlling the levels --
> the limits of production, which means that Iraq cannot
> be a part of OPEC anymore. And Iraq will have this very
> complicated institution called the Federal Oil and Gas
> Council, that will have representatives from the
> foreign oil companies on the board of it, so
> representatives from, let's say, ExxonMobil and Shell
> and British Petroleum will be on the federal board of
> Iraq approving their own contracts.
> 
> And the third point is the point about keeping Iraq's
> unity. The law is seen by many Iraqi analysts as a
> separation for Iraq fund. The law will authorize all of
> the regional and small provinces' authorities. It will
> give them the final say to deal with the oil, instead
> of giving this final say to central federal government,
> so it will open the doors for splitting Iraq into three
> regions or even maybe three states in the very near
> future.
> 
> AMY GOODMAN: Antonia Juhasz, what is the significance
> of this for Western oil companies?
> 
> ANTONIA JUHASZ: Well, in my mind, the law certainly
> opens the door to US oil companies and the Bush
> administration winning a very large piece of their
> objective of going to war in Iraq, at least winning it
> on paper. The law does almost word for word what was
> laid out in the Baker-Hamilton recommendation, which I
> discussed previously on your show, which is, at the
> very basic level, to turn Iraq's nationalized oil
> system, the model that 90% of the world's oil is
> governed by, take its nationalized oil system and turn
> it into a commercial system fully open to foreign
> corporate investment on terms as of yet to be decided.
> So it leaves vague this very important question of what
> type of contracts will the Iraqi government use. But
> what it leaves clear is that basically every level of
> the oil industry will be open to private foreign
> companies.
> 
> And, as Raed said, it introduces this very unique
> model, which is that ultimate decision making on
> contracts rests with a new council to be set up in
> Iraq, and sitting on that council will be
> representatives -- executives, in fact -- of oil
> companies, both foreign and domestic. In addition, it
> does maintain the Iraq National Oil Company, but gives
> the Iraq National Oil Company almost no preference.
> It's almost in all cases just another oil company among
> lots of other companies, including US oil companies.
> And this council, the new oil and gas council, is going
> to be the decision making body to determine what kind
> of contract the Iraqis can sign, and all contract
> models are still on the table, yet to be determined. I
> think that's left vague or open, so that the very
> necessary criticism to earlier drafts of the law, which
> included specifically production sharing agreements,
> might be quieted.
> 
> But the law definitely sets up a very dangerous setup
> for Iraq's future economic stability, economic
> development, and certainly sets the stage for a
> tremendous amount of increased hostility and violence
> to US soldiers positioned on the ground, as being seen
> as the implementers of this oil hijack.
> 
> AMY GOODMAN: Antonia, what about the advocates'
> argument for Western company involvement, that they
> need to come into Iraq to kick-start the oil
> development?
> 
> ANTONIA JUHASZ: Iraq's oil development has actually
> been going quite well since the invasion under the
> guidance of the Iraqis themselves. Prior to the war,
> Iraq produced 2.5 million barrels of oil a day. Since
> the war, it's been producing about 2.2 million barrels
> of oil a day. That's definitely dropped most recently,
> because of the intense violence in Iraq of late. And
> there have definitely been targeted actions against the
> oil system as demonstrations of opposition to the
> occupation. So I believe there is a very concrete
> argument that can be made that the best thing that Iraq
> can do right now to see its oil infrastructure secure
> and pumping at a reasonable level is to see the US
> occupation end.
> 
> Given that Iraq's oil only costs less than a dollar per
> barrel to pump and oil is selling at over $50 per
> barrel, the Iraqis are already making a tremendous
> return on their oil. The danger is that under the
> different models of oil contract that are being put on
> the table, that the Iraqis would lose the vast majority
> of that profit to the foreign oil companies.
> 
> Now, just really quickly, Iraqis have lost a fair
> amount of expertise, technical know-how, as technology
> has increased over the past eleven years and the Iraqis
> were shut out because of the sanctions. The answer to
> that is found in the models put forward by their
> neighbors, Kuwait and Saudi Arabia and Iran, which are
> technical service contracts that countries sign with
> foreign companies to bring in that expertise, but under
> very limited time frames and very specific economic
> benefits to the companies and to the country, not these
> 35-year contracts, as Raed said, and the potential for
> vast profits leaving the country.
> 
> AMY GOODMAN: Raed Jarrar, what is the response of
> Iraqis, of people in Iraq?
> 
> RAED JARRAR: No one in Iraq knows about the law. The
> law has been kept in a very low profile, and there is a
> huge propaganda campaign by the government trying to
> portray the law as straight and good for Iraq, a law
> that will turn Iraq into heaven on earth, because it
> will bring all of the foreign investments. Even
> parliamentarians in the Iraqi government, the ones who
> will have the final say to pass this law, haven't
> received a copy of this law yet. I sent them the copy
> three or four days ago, and I sent a copy to many of
> the other Iraqi bloggers and journalists, because I
> think it's very important to raise awareness about this
> and make it an issue. The Iraqi government and the Bush
> administration are trying to keep a very low profile in
> Iraq on this law. I think they're planning just to, you
> know, surprise the parliamentarians one morning and
> have them vote on it without any knowledge of what the
> law actually causes.
> 
> AMY GOODMAN: Can you talk, Raed Jarrar, about the
> control, the dispute over federal or regional control
> of oil in Iraq?
> 
> RAED JARRAR: Most of the control will be under the
> regional and provincial authorities. They have all of
> the authority of monitoring and even dealing with small
> disputes. Now, there is this bigger council that is
> very complicated, very bureaucratic. This council just
> has the authority to veto what the regional and
> provincial authorities decide. So in case the council
> just stayed silent, everything can go without any
> interruption. So, you can see that this council is kind
> of controlled by foreign companies, as well, so the
> possibilities of the council vetoing what's happening
> on the regional level will be very small. So we end up
> having a situation where Iraqis in different provinces
> will start signing contracts directly with foreign
> companies and competing between themselves, among
> themselves, among different Iraqi provinces, to get the
> oil companies to go to there without any centralized
> way in controlling this and thinking of the Iraqi
> interest and protecting Iraq as a country.
> 
> AMY GOODMAN: This document that you've translated into
> English was originally written in Arabic?
> 
> RAED JARRAR: No, the document was originally written in
> English. It was sent to the Iraqi oil ministry, and
> some parts of it were changed, and some parts were
> edited, some parts were added. So when I translated it,
> I made my translation based on a previously leaked
> English copy, which is the original version of this
> law. The English copy leaked in mid-2006. So this --
> the Arabic version now is totally based on that one.
> There are, I think out of the twenty-nine or thirty
> pages, there are around six or seven totally new pages,
> and there are new sections here and there.
> 
> But the major differences, as I mentioned, are
> regarding the authorities that can control oil, and it
> can show very clearly what the Iraqi leaders, who are
> influential and can control these laws, are planning to
> do. It can show very clearly that there are very
> influential separatist Iraqi leaders who are trying to
> use this law to fund the separatist project and to
> turning Iraq into three states.
> 
> In fact, one of the things that I did while translating
> is I kept some traces of the original one and put a
> line over the -- like struck them, so that people can
> see the small differences, how many of the authorities
> that were supposed to be a given to the central
> government and to the ministry now were shifted to the
> regional authorities. Like, this is the most
> interesting thing that happened in the changes. But
> overall, it's a law that is promoted by the Bush
> administration and the IMF. It's not at all an urgent
> item on the Iraqi agenda. It's just an urgent item on
> the Bush and the IMF agenda.
> 
> AMY GOODMAN: Finally, Antonia, who has the largest oil
> reserves in the world, the top three?
> 
> ANTONIA JUHASZ: Saudi Arabia is one. Iraq is two. Iran
> is three. And I think in that list, particularly
> obviously Iraq and Iran, you can see pretty clearly a
> key focus for the Bush administration in its remaining
> years in office.
> 
> AMY GOODMAN: Do you think that is related to this
> current intensification of focus on Iran, the
> possibility of a US strike on Iran?
> 
> ANTONIA JUHASZ: Oh, most certainly. You know, to be
> clear, oil is about a lot of things. Oil is about
> profit, and it's about the money that the oil interests
> in the United States, which of course also include
> members of the Bush administration, can get.
> 
> But controlling the second and third largest oil
> reserves in the world also has a tremendous amount to
> do with imperial power and global power that the Bush
> administration wants. Controlling that oil denies it to
> other countries that want it, like China and India,
> countries that the Bush administration now sees itself
> in rivalry to.
> 
> And it also gets the government in control of a
> resource that is obviously dwindling in supply and
> which they want to hold onto. And they have been quite
> clear, meaning members of the Bush administration, but
> also the United States government, in its dedication to
> securing Middle East oil for the United States, and
> that agenda has hit high speed under this
> administration, where corporate and oil interests are
> part and parcel to government interest.
> 
> And I definitely think that if we in the United States
> want to end the war in Iraq and want to prevent another
> war in Iran, we have to pull back this curtain over
> that three-letter word, 'oil,' and expose this agenda.
> The four-year anniversary of the war, coming up March
> 19th, is a critically important opportunity to do that
> and in the lead-up to that anniversary to really target
> our attention on demanding that our members of Congress
> defund the war and that we direct our attention and our
> protest energy on revealing this oil agenda. And to
> that end, Oil Change International, the organization I
> work with, is going to be in the coming weeks working
> with our allies to pull together some clear lists of
> activities and actions that folks can do, particularly
> on exposing the oil law in Iraq. So I encourage folks
> to come to our website to check that out.
> 
> AMY GOODMAN: Antonia Juhasz, I want to thank you for
> being with us, Tarbell Fellow at the Oil Change
> International, author of The Bush Agenda: Invading the
> World One Economy at a Time. And Raed Jarrar in
> Washington, D.C., is the Iraq Project Director for
> Global Exchange. His blog is
> raedinthemiddle.blogspot.com.
> 
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