[WCUSP] Forget media smokescreens: it's about oil

[yvonne simmons]

> Iraqis: Oil Law Won't Favor Americans
>
http://finance.comcast.net/www/news.html?x=http://www.comcast.net/data/news/2007/01/27/572498.xml&cvqh=itn_oillaw
> 
> By KIM GAMEL, Associated Press Writer
> January 27, 2007
> 
> BAGHDAD, Iraq - Iraqi officials say a hotly debated
> proposed oil law will not favor Americans but
> acknowledge that foreign companies will be allowed
> to take their profits out of the country _ an
> incentive to draw foreign investment.
> 
> The Oil Ministry has been struggling for months to
> reach a compromise over draft legislation to govern
> Iraq's most important industry and pave the way for
> much-needed investment and know-how to revitalize
> the devastated infrastructure. But the measure faces
> strong objections by ethnic Kurds and concern about
> American influence in the sector.
> 
> Published reports in the Middle East said the
> proposal would provide for so-called product sharing
> agreements that would give international oil firms
> 70 percent of the oil revenues to recover their
> initial investments and subsequently allow them 20
> percent of the profits without any tax or
> restrictions on transferring funds abroad.
> 
> "Without a decisive military victory, the U.S.
> occupation of Iraq seems to be about to grab its oil
> prize by establishing a new sharing arrangement,"
> the English-language Yemen Observer said Saturday,
> echoing a frequent criticism that the U.S.-led
> invasion was aimed in part at capturing Iraq's oil.
> 
> Iraqi officials denied that the proposed law would
> favor Americans but stressed that it would set terms
> aimed at attracting international funds and know-how
> to an industry that faces a rampant insurgency and
> struggled even before the war due to sweeping U.N.
> sanctions imposed after Saddam Hussein's 1990
> invasion of Kuwait.
> 
> Trade Minister Abed Falah al-Sudani told The
> Associated Press that American companies will be
> among those bidding for contracts under the proposed
> law and the Iraqis will "take the best offer ... and
> take into consideration the experience of the
> company."
> 
> He did not specify monetary terms but said "foreign
> companies will be able to win concessions for a long
> time," without elaborating.
> 
> "Iraq's economy has suffered because of the security
> situation and the economic laws, but we now want to
> implement laws that reform the country and reform
> the economy. These laws will increase the growth of
> the economy," he said.
> 
> Prime Minister Nouri al-Maliki has pressed hard for
> a new oil law to be passed since he came to office
> on May 20. And President Bush stepped up the
> pressure on the Iraqis to pass legislation to share
> oil revenues among all Iraqis in announcing his new
> Iraq strategy earlier this month.
> 
> Iraqi officials also have struggled to overcome
> strong objections by ethnic Kurds in the oil-rich
> north who are reluctant to give up regional control.
> 
> On Jan. 18, the Oil Ministry said the law was nearly
> ready to be submitted to the Cabinet and expressed
> hope it could be ratified by parliament within a
> month.
> 
> But ministry spokesman Assem Jihad said Friday the
> measure had been delayed by unspecified "differences
> among some groups." He said the ministry hoped the
> differences could be overcome so parliament could
> approve the bill before a monthlong recess Feb. 10.
> 
> The distribution of oil revenues and central control
> over contracts are believed among the key sticking
> points.
> 
> Kurdish lawmaker Mahmoud Othman pointed out that the
> constitution passed last year provided for a Kurdish
> federation in the north that would co-manage
> existing oil fields along with the central
> government and have full control over new ones.
> Shiites would control new oil fields in their
> southern regions _ terms that have drawn objections
> from the disaffected Sunni minority.
> 
> Othman said the Kurds want the final say in signing
> contracts with foreign oil companies for projects in
> their area, signaling opposition to plans to give
> full control over contracts to a central oil
> committee.
> 
> "If they don't amend the law or the current draft or
> reach a mutual agreement, the Kurdish side will not
> accept it," Othman said.
> 
> Jihad said a Kurdish delegation will visit Baghdad
> to try to resolve some outstanding issues.
> 
> "The Kurds talk about this issue as if they are from
> another country while they are part of the Iraqi
> government and parliament. They want bigger share
> for Kurdistan regarding the oil revenues."
> 
> Negotiators also are stuck over taxes and the terms
> for agreements with international companies, as well
> as concerns that American and other multinational
> firms will get a disproportionate share of the
> profits.
> 
> Jihad dismissed claims that the proposed law would
> allow 70 percent of Iraq's oil to be sold to U.S. or
> other foreign oil companies but conceded that they
> would not face restrictions in taking profits
> outside Iraq.
> 
> He said the proposed law would establish that
> central product sharing agreements, or PSAs, would
> be negotiated with the companies on an individual
> basis.
> 
> "Some are trying to give a distorted idea about the
> new law that aims at serving Iraq's interests. Such
> reports are baseless," he said. "We should
> differentiate between monopoly and investment."
> 
> "The foreign companies can take their profits
> outside Iraq without any restriction because the aim
> of the law is to encourage investment," he said.
> 
> He said the question of taxes was still being
> negotiated, adding that the law provides a two-year
> tax exemption for general investment projects but no
> decision had been made on whether they should tax
> oil investments.
> 
> "This law protects both the full rights of the
> investors and of the Iraqi government," he said.
> 
> Iraq is believed to be producing around 2.2 million
> barrels of oil a day and exports about 1.5 million,
> well below prewar levels of 2.5 to 3 million barrels
> a day.
> 
> Some legislators pointed out that Iraq is desperate
> and needs all the help it can get.
> 
> "Foreign companies are welcome. American companies
> have the experience and they have people on the
> ground in Iraq. American companies have the courage
> to come into the market," said Amrah al-Baldawi, a
> member of the parliament's economic committee.
> 
> ___
> 
> Associated Press writers Qassim Abdul-Zahra, Sameer
> N. Yacoub in Baghdad and Yahya Barzani in
> Sulaimaniyah contributed to this report.
> 



 
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