Visiting Al-Amarah to boost the morale of troops fighting Shia rebels on Monday, Iraq's Prime Minister Nuri Al-Maliki vowed that forces loyal to the government would continue their offensive in the southern province until anti-government armed groups are uprooted. The onslaught is an extension of military operations that began in Basra in March to end rebel control of Iraq's second largest city.
(...) The answer seems to lie in oil. The two southern provinces sit on a lake of 150 billion barrels, i.e. 95 per cent of Iraq's oil reserves. The northern province provides Iraq with its only oil export outlet to the Mediterranean. With oil prices nudging $140 per barrel and the US economy on the verge of freefall, Washington seems to have decided that it cannot wait any longer to use Iraq's huge reserve to increase output and lower the prices. On 19 June, The New York Times reported that Shell, BP and Exxon Mobil, Total and Chevron, heirs to the infamous seven sisters cartel that dominated world energy production in the latter half of the 20th century, were close to signing deals with Iraq to develop its oil and gas fields. The report came after Baghdad said it is about to sign agreements with international oil firms to revamp Iraq's oil fields, ravaged by the war and sabotaged by armed groups. Under the deals, worth around $500 million, the five firms will help overhaul Iraq's oil fields to boost the current production by 600,000 barrels a day, an increase of nearly 20 per cent.

it's the oil:
Iraq has 115 billion barrels of known oil reserves. That is more than five times the total in the United States. And, because of its long isolation, it is the least explored of the world’s oil-rich nations. A mere two thousand wells have been drilled across the entire country; in Texas alone there are a million. It has been estimated, by the Council on Foreign Relations, that Iraq may have a further 220 billion barrels of undiscovered oil; another study puts the figure at 300 billion. If these estimates are anywhere close to the mark, US forces are now sitting on one quarter of the world’s oil resources. The value of Iraqi oil, largely light crude with low production costs, would be of the order of $30 trillion at today’s prices. For purposes of comparison, the projected total cost of the US invasion/occupation is around $1 trillion.
(...) The draft law that the US has written for the Iraqi congress would cede nearly all the oil to Western companies. The Iraq National Oil Company would retain control of 17 of Iraq’s 80 existing oilfields, leaving the rest – including all yet to be discovered oil – under foreign corporate control for 30 years.
(...) By establishing permanent military bases in Iraq. Five self-sufficient ‘super-bases’ are in various stages of completion. All are well away from the urban areas where most casualties have occurred. There has been precious little reporting on these bases in the American press, whose dwindling corps of correspondents in Iraq cannot move around freely because of the dangerous conditions.
(...) In February last year, the Washington Post reporter Thomas Ricks described one such facility, the Balad Air Base, forty miles north of Baghdad. A piece of (well-fortified) American suburbia in the middle of the Iraqi desert, Balad has fast-food joints, a miniature golf course, a football field, a cinema and distinct neighbourhoods – among them, ‘KBR-land’, named after the Halliburton subsidiary that has done most of the construction work at the base. Although few of the 20,000 American troops stationed there have ever had any contact with an Iraqi, the runway at the base is one of the world’s busiest. ‘We are behind only Heathrow right now,’ an air force commander told Ricks.
(...) As for the number of US troops permanently stationed in Iraq, the defence secretary, Robert Gates, told Congress at the end of September that ‘in his head’ he saw the long-term force as consisting of five combat brigades, a quarter of the current number, which, with support personnel, would mean 35,000 troops at the very minimum, probably accompanied by an equal number of mercenary contractors. (He may have been erring on the side of modesty, since the five super-bases can accommodate between ten and twenty thousand troops each.) These forces will occasionally leave their bases to tamp down civil skirmishes, at a declining cost in casualties. As a senior Bush administration official told the New York Times in June, the long-term bases ‘are all places we could fly in and out of without putting Americans on every street corner’. But their main day-to-day function will be to protect the oil infrastructure.'
(...) Among the winners: oil-services companies like Halliburton; the oil companies themselves (the profits will be unimaginable, and even Democrats can be bought); US voters, who will be guaranteed price stability at the gas pump (which sometimes seems to be all they care about); Europe and Japan, which will both benefit from Western control of such a large part of the world’s oil reserves, and whose leaders will therefore wink at the permanent occupation; and, oddly enough, Osama bin Laden, who will never again have to worry about US troops profaning the holy places of Mecca and Medina, since the stability of the House of Saud will no longer be paramount among American concerns. Among the losers is Russia, which will no longer be able to lord its own energy resources over Europe. Another big loser is Opec, and especially Saudi Arabia, whose power to keep oil prices high by enforcing production quotas will be seriously compromised.
(...) In the short term, Iran has done quite well out of the Iraq war. Iraq’s ruling Shia coalition is now dominated by a faction friendly to Tehran, and the US has willy-nilly armed and trained the most pro-Iranian elements in the Iraqi military. As for Iran’s nuclear programme, neither air strikes nor negotiations seem likely to derail it at the moment. But the Iranian regime is precarious. Unpopular mullahs hold onto power by financing internal security services and buying off elites with oil money, which accounts for 70 per cent of government revenues. If the price of oil were suddenly to drop to, say, $40 a barrel (from a current price just north of $80), the repressive regime in Tehran would lose its steady income. And that is an outcome the US could easily achieve by opening the Iraqi oil spigot for as long as necessary (perhaps taking down Venezuela’s oil-cocky Hugo Chávez into the bargain).
(...) And think of the United States vis-à-vis China. As a consequence of our trade deficit, around a trillion dollars’ worth of US denominated debt (including $400 billion in US Treasury bonds) is held by China. This gives Beijing enormous leverage over Washington: by offloading big chunks of US debt, China could bring the American economy to its knees. China’s own economy is, according to official figures, expanding at something like 10 per cent a year. Even if the actual figure is closer to 4 or 5 per cent, as some believe, China’s increasing heft poses a threat to US interests. (One fact: China is acquiring new submarines five times faster than the US.) And the main constraint on China’s growth is its access to energy – which, with the US in control of the biggest share of world oil, would largely be at Washington’s sufferance. Thus is the Chinese threat neutralised.

why iraqis oppose u.s.-backed oil law:
Iraq has a long labor history. Union activists, banned and jailed under the British and their puppet monarchy, organized a labor movement that was the admiration of the Arab world when Iraq became independent after the revolution of 1958. When Saddam Hussein came to power, though, he drove its leaders underground, killing or imprisoning the ones he could catch.
(...) The al-Maliki government has seized all union funds and turned its back on a wave of assassinations of union leaders. After the June strike, Iraq's oil minister ordered oil industry officials to refuse to recognize or bargain with the oil worker unions. Iraq's oil industry was nationalized in the 1960s, like that of every other country in the Middle East. The Iraqi oil union became, and remains, the industry's most zealous guardian.
(...) The unions have vowed to strike if the law is implemented. At the occupation's end, the government in Baghdad will need control of the oil wealth to rebuild a devastated country. That gives Iraqis a big reason to fight to protect public ownership and control of the oil industry.

what is holding up the delivery of the long-awaited iraqi oil law?:
External influences were for the most part, behind the approval of a draft of the oil law, which will be the first and major step in the privatization of Iraqi oil wealth and will ensure that the oil will be produced and marketed by the IOCs with enormous profit to them.
(...) Neither the US Republican administration nor the Democrats had any disagreement with this policy and made the approval of the oil law a benchmark for future US strategy in Iraq within the Iraqi Study Group report.
(...) The IMF made the approval of the oil law one of the main conditions for reducing the Iraqi international debts, as declared in December 1, 2005 in the Paris meetings between the IMF and representatives of the Iraqi Government.
(...) More and more MPs are calling for the law to be carefully studied before its approval. The Iraqi parliament has gone into summer recess without discussing the oil law, but up until now the only members who are openly standing against the oil law are the MPs from Sadr's Movement and some individual members from the "Iraqi Accord," the Dawa Party and some independent MPs.
(...) The latest Oil poll, which was carried out in June and July 2007 by KA Research, has shown that the Iraqis oppose plans to open the country's oil fields to foreign investment by a factor of two to one (63% oppose to 31% for).
(...) The Bush Administration and their Ambassador in Baghdad had openly threatened to replace Al-Maliki's government with a new government, headed by their man in Iraq -- the old Baathist, Iyad Allawi. Al-Maliki has openly accused Allawi in several speeches of attempting to overthrow his government with the help of some units of the Iraqi army and security generals including the head of the Iraqi security forces, the old Baathist general Mohammed Al-Shahwani. These generals were appointed to their positions during Allawi's appointed government by the last US official administrator Paul Bremer back in May 2004, and are still taking their orders directly from the US embassy in Baghdad.
(...) The US administration recognized that a US-led military coup d'etat would not result in any laws being recognized as legitimate by the international community if parliament were to be dissolved. They therefore moved to a new policy, which involved direct interference with the political process in Iraq through their more reliable allies to reorganize the political alliance on which the government relied in order to achieve their goals. They finally succeeded in achieving the establishment of such a front, which was called the "The front of the moderates" on August 15, between the two main Kurdish parties (KDP and PUK), two of the Shiite parties (the SCIRI and Al-Dawa party -- the Al-Maliki wing is called the "External organization"), with negotiations still ongoing to persuade the Islamic Party/Accord front -- the main Sunni party -- to join this new alliance.
(...) The claim of the US Administration that the oil and gas law will allow all Iraqis to share the oil revenue is no more than another peace of misinformation, as the "Revenue Sharing Law" is a separate federal revenue law which is still being negotiated between the different Iraqi parties representing all sectors of Iraqi society.
(...) The latest oil poll which was carried out in June and July 2007 by KA Research has shown that the vast majority of Iraqis (91%) did not feel informed enough about the oil law. This included the 33% who said they knew a little information on the law, 30% who said that they were not very informed and 28% that stated that they knew nothing about it.

iraq update (may 18th):
Meanwhile. although the Al-Adhamiya wall is nearing completion, the Iraqi parliament has passed a unanimous decision calling on the occupation forces to stop building it. "We know that our decision will be ignored, but we had to make the point for the record," an Iraqi parliamentarian who did not wish to be identified said. "The wall was built, ostensibly to protect Al-Adhamiya from attacks, but it will only serve to exacerbate factional segregation," he said. [a sovereign, democratic nation indeed!]
(...) In a rare sign of unity, the inhabitants of the Sunni neighbourhood of Al-Adhamiya and the Shia neighbourhood of Al-Kadhimiya staged a joint demonstration from Al-Adhamiya to Al-Kadhimiya, calling for the wall to be removed. However, the demonstration was barely covered in the media.
(...) On another front, 144 parliamentarians signed a petition calling upon the occupation forces to set a timetable for their withdrawal. The parliamentary spokesman for the Sadr Block, Saleh Al-Uqayli, said the petition was the idea of Al-Sadr supporters. "Those who signed the petition call themselves the Liberal Block. This is not a new parliamentary block, but only a group of parliamentarians who demand a timetable for withdrawal."
(...) At present, the Iraqi parliament is debating an oil law, but some argue that the law is designed to promote US interests. A source at the Probity Committee said that up to $1.5 billion have been lost due to wastage and mismanagement in the Iraqi oil sector. Foreign sources add that, since the beginning of the occupation, billions of dollars in oil revenues are believed to have vanished due to oil- related corruption.

trade unionism in iraq:
Iraq’s largest oil workers’ trade union will strike tomorrow, in protest at the controversial oil law currently being considered by the Iraqi parliament. The move threatens to stop all oil exports from Iraq.
(...) The Union, representing 26,000 oil workers, has held three previous
strikes since 2003, each time stopping exports, for up to two days at a
time. The announcement of the strike has spurred negotiations with the
Ministry of Oil, which are ongoing.
(...) Federation President Hassan Jumaa Awad al Assadi said: ‘The oil law does
not represent the aspirations of the Iraqi people. It will let the
foreign oil companies into the oil sector and enact privatisation under
so called production sharing agreements. The federation calls for not
passing the oil law, because it does not serve the interests of the
Iraqi people.”
(...) The Union is not alone in its’ condemnation of the current oil law.
Opponents of the law also include all of Iraq’s other trade unions, a
number of political parties, and a group of over 60 senior Iraqi oil
experts.
(...) Hassan Jumaa went on to say: “The federation calls on all unions in the
world to support our demands and to put pressure on governments and the
oil companies not to enter the Iraqi oil fields.”

oil and america:
One could date it back to 1980 when President Jimmy Carter -- before his Habitat for Humanity days -- declared that Persian Gulf oil was "vital" to American national interests. So vital was it, he announced, that the U.S. would use "any means necessary, including military force" to sustain access to it"
(...) Or we could date it all the way back to World War II, when British officials declared Middle Eastern oil "a vital prize for any power interested in world influence or domination," and U.S. officials seconded the thought, calling it "a stupendous source of strategic power and one of the greatest material prizes in world history."
(...) We know, for example, that, before and after he ascended to the Vice-Presidency, Dick Cheney has had his eye squarely on the prize. In 1999, for example, he told the Institute of Petroleum Engineers that, when it came to satisfying the exploding demand for oil, "the Middle East, with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies." The mysterious Energy Task Force he headed on taking office in 2001 eschewed conservation or developing alternative sources as the main response to any impending energy crisis, preferring instead to make the Middle East "a primary focus of U.S. international energy policy." As part of this focus, the Task Force recommended that the administration put its energy, so to speak, into convincing Middle Eastern countries "to open up areas of their energy sectors to foreign investment" -- in other words, into a policy of reversing 25 years of state control over the petroleum industry in the region.
(...) In 2002, just a year after Cheney's Task Force completed its work, and before the U.S. had officially decided to invade Iraq, the State Department "established a working group on oil and energy," as part of its "Future of Iraq" project. It brought together influential Iraqi exiles, U.S. government officials, and international consultants. Later, several Iraqi members of the group became part of the Iraqi government. The result of the project's work was a "draft framework for Iraq's oil policy" that would form the foundation for the energy policy now being considered by the Iraqi Parliament.
(...) Indeed, Iraq could someday become the most important source of petrochemical energy on the planet. According to the U.S. Energy Information Administration, Iraq possesses 115 billion barrels of proven oil reserves, third largest in the world (after Saudi Arabia and Iran). About two-thirds of its known oil reserves are located in Shia southern Iraq, and the final third in Kurdish northern Iraq. However, in energy terms, only about 10% of the country has actually been explored and there is good reason to believe that modern methods -- which have not been applied since the beginning of the Iraq-Iran War in 1980 -- might well uncover magnitudes more oil. Estimates of the possible new finds offered by officials of various interested governments range from 45 billion to 214 billion additional barrels, depending on the source; but some non-governmental experts see the final treasure exceeding 400 billion barrels. If the latter figure is correct, then Iraq would likely become the world's largest source of oil.
(...) Moreover, both its current fields and many of the potential new discoveries would be extremely cheap to access, if security weren't such a problem today in Iraq. James Paul of the international policy monitoring group, the Global Policy Forum, offers this positive view: "According to Oil and Gas Journal, Western oil companies estimate that they can produce a barrel of Iraqi oil for less than $1.50 and possibly as little as $1.... This is similar to production costs in Saudi Arabia and lower than virtually any other country."
(...) Knowledge of this level of underproduction was certainly one factor in Deputy Secretary of Defense Paul Wolfowitz's pre-war prediction that the administration's invasion and occupation of Iraq would pay for itself; he hoped for a quick postwar increase in production to 3.5 million barrels per day or, at the $30 per barrel price of oil at that time, close to $40 billion per year in revenues. An expected expansion in production levels (once the oil giants were brought into the mix) to perhaps 6.5 million barrels, through the development of new oil fields or more efficient exploitation of existing fields, had the potential to more than cover the expected American short-term military costs and leave the new Iraqi government flush as well.
(...) Paul Bremer, the new head of the American occupation, promulgated a series of laws designed, among other things, to kick-start the development of Iraqi oil. In addition to attempting to transfer management of existing oil facilities (well heads, refineries, pipelines, and shipping) to multinational corporations, he also set about creating an oil-policy framework, unique in the region, that would allow the major companies to develop the country's proven reserves and even to begin drilling new wells.
(...) [resistance to these plans] All these plans were, however, quickly frustrated, both by the growing Sunni insurgency and by civil resistance. Iraq's oil workers quickly unionized -- even though Bremer extended Saddam's prohibition on unions in state-owned companies -- and effectively resisted the transfer of management duties to foreign companies. In one noteworthy moment, the oil workers actually refused to take orders from Bechtel officials in the oil hub of Basra, thus preserving their own jobs as well as the right of the Iraqi state-owned Southern Oil Company to continue to control the operation in that region. Bechtel's management contract was subsequently voided. At the same time, the growing insurgency, acting on a general Iraqi understanding that a major goal of the occupation was to "steal" Iraqi oil, systematically began to attack the oil pipelines that traveled through the Sunni areas of the country. Within a few months, all oil exports in the northern part of Iraq were interrupted -- and the northern export pipelines have remained generally unusable ever since.
(...) To resistance of various sorts must be added the "contribution" of the major American corporations involved in "reconstructing" Iraq, notably Halliburton and Bechtel. These crony corporations, with close ties to the Bush administration, accepted huge fees to rehabilitate dilapidated or damaged oil facilities. Almost without fail, they chose not to repair existing plants locally or to employ the raft of skilled Iraqi technicians who had used remarkable ingenuity in maintaining these facilities during a dozen years of UN sanctions. Working under cost-plus agreements that guaranteed a fixed profit rate no matter how much an operation ultimately cost, they preferred instead to install expensive new proprietary equipment. Then, in the absence of any outside oversight, they ran up huge expenses and frequently failed to complete their contracts, leaving the oil facilities they were servicing in states of disrepair or partial repair -- and equipped with technology that local technicians could not service.
(...) hen technical sovereignty was finally handed over to an appointed Iraqi government headed by the CIA's favorite Iraqi exile, Iyad Allawi, in June 2004, the new premier embraced Bremer's policy, but to no avail. The international oil companies were no more impressed with his future than they had been with Bremer's. Like Wolfowitz, they knew that Iraq "floats on a sea of oil"; unlike him, they were no dreamers. They weren't willing to risk their capital in the dangerous and legally ambiguous circumstances then prevailing. As a result, the first two years of Bush administration efforts to "access" Iraqi oil failed -- and dismally so at that. Average production never exceeded the bottom-of-the-barrel 2.5 million barrels Saddam's regime managed to extract on its worst days. By 2006, production had slipped below 2 million barrels per day.
(...) The State Department planners had concluded that Production Sharing Agreements -- a method that granted multinational oil companies effective control of oil fields without transferring permanent ownership to them -- would be the basic instrument through which a future "independent" Iraq would develop new oil fields. Wary by now of being seen as the chief advocate of this policy, which it so desperately wanted in place, the Bush administration concocted a strategy that would enlist the international community in pressuring Iraq to adopt its program. This was done by making the International Monetary Fund (IMF) a key player in Iraqi oil policy. Through loans in the 1980s and reparations imposed for his invasion of Kuwait in 1990, Saddam had accumulated $120 billion in external debt, the largest per capita debt in the world and a potentially insurmountable obstacle to economic recovery, even in oil-rich Iraq. One option available to the new government was to declare this debt "odious," a technical term in international law referring to debt accumulated by authoritarian rulers for their own personal or political aggrandizement.
(...) Saddam's expansionist war against Iran, his use of public funds to build ostentatious monuments and palaces, his transfer of billions to his personal accounts, and his failure to maintain the infrastructure of the country all were excellent evidence that the debt was indeed odious; and the U.S. claimed as much for almost $40 billion of it, held by 19 industrialized countries known as the Paris Club. Instead of seeking to cancel this debt (and the remaining $80 billion) entirely, however, the Bush administration sent James Baker, former Secretary of State under George H. W. Bush, to the Paris Club to negotiate conditional forgiveness. The resulting agreement immediately forgave $12 billion, but left $28 billion on the books. A second $12 billion would be abrogated when the Iraqi government signed onto "a standard International Monetary Fund program," and a further $8 billion three years later, after the IMF confirmed Iraqi compliance. Even if "successful," almost $8 billion would still be outstanding to the Paris Club -- together with $80 billion not covered by the agreement.
(...) The "standard International Monetary Fund program," not surprisingly, included the now familiar American policies regarding Iraqi oil, as well as the use of Profit Sharing Agreements and a host of other provisions that would open the Iraqi economy as a whole, and the oil sector in particular, to investment by multinational corporations. Among the most punitive of the provisions was a demand for an end to the economic breadbasket that guaranteed all Iraqi families low prices for fuel and food staples. In a country with, by 2005, somewhere between 30% and 70% unemployment, average wage levels under $100 per month, and escalating inflation, these Saddam-era subsidies meant the difference between basic subsistence and disaster for a large proportion of Iraqis.
(...) Zaid Al-Ali, an international lawyer working on development issues in Iraq, described the agreement as a "perfect illustration of how the industrialized world has used debt as a tool to force developing nations to surrender sovereignty over their economies."
(...) The newly elected Iraqi National Assembly promptly denounced this agreement as "a new crime committed by the creditors who financed Saddam's oppression." This forceful expression reflected the opinions of the Assembly's constituents. After all, 76% of Iraqis believed that the main reason for the Bush administration's invasion was "to control Iraqi oil."
(...) The U.S. then began pressuring the Iraqi government to draft a definitive petrochemical law that would conform to the IMF guidelines. Given the levels of resistance to the very idea, this work was conducted in secret and took until the end of 2006 to complete. As independent journalist Joshua Holland described the process: "Just months after the Iraqis elected their first constitutional government, USAID sent a BearingPoint adviser to provide the Iraqi Oil Ministry 'legal and regulatory advice in drafting the framework of petroleum and other energy-related legislation, including foreign investment'.... The Iraqi Parliament had not yet seen a draft of the oil law as of July [2006], but by that time... it had already been reviewed and commented on by U.S. Energy Secretary Sam Bodman, who also 'arranged for Dr. Al-Shahristani to meet with nine major oil companies -- including Shell, BP, ExxonMobil, ChevronTexaco and ConocoPhillips -- for them to comment on the draft.'"
(...) When the "Draft Hydrocarbon Law" was finally delivered to the Iraqi Parliament on February 18, 2007, key provisions had already been leaked and immediately denounced by the full spectrum of the Iraqi opposition. Taking turns registering dismay were the majority of the Parliament, a wide range of government officials, the leadership of major Sunni political parties, the union of oil workers, the Sadrists -- the most powerful Shia grouping -- and the visible leadership of the insurgency. All this led to many changes in the law, including the removal of all mention of either privatization or Production Sharing Contracts, which would have given multinational oil companies 15-25 years of basically unregulated operational control over Iraqi oil facilities. The amended version in no way excluded the use of PSAs, but it removed the explosive designation from the actual wording of the law.
(...) [PSA´s]Production sharing agreements are generally applied in circumstances where there is a strong possibility that oil exploration will be extremely costly or even fail, and/or where extraction is likely to prove prohibitively expensive. To offset huge and risky investments, the contracting company is guaranteed a proportion of the profits, if and when oil is extracted and sold. In the most common of these agreements, the proportion remains very high until all development costs are amortized, allowing the investing company to recoup its investment expenditures (if oil is found), and then to be rewarded with a larger-than-normal profit margin for the remainder of the contract which, in the Iraqi case, could extend for up to 25 years. None of these conditions apply in Iraq: huge reservoirs of easily accessible oil are already proven to exist, with more equally accessible fields likely to be discovered with little expense. This is why none of Iraq's neighbors utilize PSAs. Saudi Arabia, Kuwait, Iran, and the United Arab Emirates all pay the multinationals a fixed rate to explore and develop their fields; and all of the profits become state revenues.
(...)The advocates of PSAs in Iraq justify their use by arguing that $20 billion would be needed to develop the Iraqi fields fully and that favorable PSAs are the only way to attract such heavy doses of finance capital under the current highly dangerous circumstances. This assertion seems, however, to be little more than a smokescreen. No major oil companies are willing to invest in Iraq now, no matter how sweet the deal. If order is restored, on the other hand, Iraq would have no trouble attracting vast amounts of finance capital to develop reserves that could well be worth in excess of $10 trillion and hence would have no need whatsoever for PSAs.
(...) Based on leaked information, journalists reported that the PSAs envisioned by the Iraqi petrochemical law contained extremely favorable provisions for the oil companies, in which they would be entitled to 70% of profits until development expenses were amortized and 20% afterwards. This would have guaranteed them at least twice the typical profit margin over the long run and many times that figure during the initial years.
(...) There are other elements in the law (and the possible PSA contracts) that have also roused resistance inside Iraq. Among the most controversial:
· Insofar as PSAs or their legal equivalent were enacted, Iraq would lose control over what levels of oil the country produced with the potential to substantially weaken the grip of OPEC on the oil market.
· The law would allow the oil companies to fully repatriate all profits from oil sales, almost insuring that the proceeds would not be reinvested in the Iraqi economy.
· The Iraqi government would not have control over oil company operations inside Iraq. Any disputes would be referred instead to pro-industry international arbitration panels.
· Contacting companies would not be obliged to hire Iraqi workers, and could pursue the current policy of employing American technicians and South Asian manual laborers.
· No contracts would be public documents.
(...) Several African countries with vast mineral riches have been subjected to these sorts of conditions, with large multinational companies extracting both minerals and profits while returning only a tiny fraction of the proceeds to the local population. As the resources are taken out of the ground and the country, the local population actually becomes poorer, while the potential for future prosperity is drained.
(...) [prospects for resistance]The Parliament itself may be the first line of defense. It challenged the original IMF agreement and has refused to consider the bill for two months, already missing a March deadline for passage that American politicians of both parties had pronounced an important "benchmark" by which to judge the viability of Prime Minister Nouri al-Maliki's government.
(...) Rafiq Latta, a London-based oil analyst, told Nation reporter Christian Parenti, "The whole culture of the ministry opposes [the law].... Those guys ran the industry very well all through the years of sanctions. It was an impressive job, and they take pride in 'their' oil."
(...) Perhaps most formidable of all is the Federation of Oil Unions, with 26,000 members and allies throughout organized labor. The oil workers overturned contracts in 2003 and 2004 that would have placed substantial oil facilities under multinational corporate control; and they initiated a vigorous campaign against the U.S. sponsored oil program as early as June 2005 -- calling a conference to oppose privatization attended by "workers, academics, and international civil-society groups." In January 2006, they convened a convention composed of all major Iraqi union groups in Amman, Jordan, which issued a manifesto opposing the entire neo-liberal U.S. program for Iraq, including any compromise on national control of oil production.
(...) Iraq's trade unions, speaking in a single voice, declared that: "Iraqi public opinion strongly opposes the handing of authority and control over the oil to foreign companies, that aim to make big profits at the expense of the people. They aim to rob Iraq's national wealth by virtue of unfair, long term oil contracts that undermine the sovereignty of the State and the dignity of the Iraqi people."
(...) He [union leader] then called on the government to consult Iraqi oil experts (who had not participated in drafting the law) and "ask their opinion before sinking Iraq into an ocean of dark injustice."
(...) Finally -- and no small matter -- the armed resistance is also against the oil law. The Sunni insurgency underscored its opposition by assassinating Vice President Adel Abdul Mahdi, a major advocate of the pending law, on the day the bill was made public. The significance of the opposition of the Sunni insurgency is amplified by the stance of the Sadrists, the most rebellious segment of the Shia majority. Sadr spokesman Sheikh Gahaith Al Temimi warned journalist Christian Parenti that while the Sadrists would "welcome" foreign investment in oil, they would do so only "under certain conditions. We want our oil to be developed, not stolen. If a bad law were to be passed, all people of Iraq would resist it."
(...) Active opposition by the Parliament alone, or by the unions alone, or by the Sunni insurgency alone, or by the Sadrists alone might be sufficient to defeat or disable the law. The possibility that such disparate groups might find unity around this issue, mobilizing both the government bureaucracy and overwhelming public opinion to their cause, holds a much greater threat: the possibility of creating a unified force that might push beyond the oil law to a more general opposition to the American occupation.
(...) he likelihood that any future Iraqi government which takes on a nationalist mantel will consider such an agreement in any way binding is nil. One day in perhaps the not so distant future, that "law," even if briefly the law of the land, is likely to find itself in the dustbin of history, along with Saddam's various oil deals. As a result, the Bush administration's "capture of new and existing oil and gas fields" is likely to end as a predictable fiasco.

chavez and oil:
The Times went on to claim this action would undermine Venezuela's growth hinting Big Oil's threat to leave might get Chavez to back down enough to get them to stay. It never happened as this writer suggested April 12 in an article titled "Wall Street Journal and New York Times Attack journalism." The article made it clear oil exploration and production in Venezuela is so profitable that even with a smaller share of the profits US, European and other Big Oil investors wouldn't dream of leaving. Whine plenty, leave, not likely, and now we know they won't.
(...) Hugo Chavez, in fact, is a self-proclaimed social democrat charting his own independent course toward progressive "21st century socialism" along the lines Latin American expert James Petras calls the "pragmatic left" in contrast to the more "radical left" of Colombia's FARC guerrillas; elements of "teachers and peasant-indigenous movements in Oaxaca, Guerrero and Chiapas in Mexico;" many "small Marxist groups in Argentina, Bolivia, Chile and elsewhere;" and Venezuela's "peasant and barrio movements," among others. Other Latin American leaders Petras calls "pragmatic" leftists include Bolivia's Evo Morales, Cuba's Castro and many "large electoral parties and major peasant and trade unions in Central and South America" including Mexico's PRD party, El Salvador's FMLN, Chile's Communist Party, "the majority in Peruvian (Ollanta) Humala's parliamentary party;" and others including "the great majority of left Latin American intellectuals."
(...) Hugo Chavez offers them a new choice having announced in March he intends creating a Bank of the South social democratic alternative to the repressive neoliberal Washington Consensus IMF-World Bank model. So far Bolivia and Argentina have agreed to be part of it with Chavez hoping other Latin countries will join as well by contributing 10% of their capital reserves for this enterprise he hopes will be operating by summer.
(...) Additional parts of Chavez's plan involve forging stronger ties to other oil importing nations like China to reduce Venezuela's dependency on a hostile US. He also announced April 29 the nation hopes to gradually sell its seven US-based Citgo refineries replacing them with a new Latin American-based network in Bolivia, Ecuador, Nicaragua, Haiti and Dominica. It's part of his plan to provide the region a stable oil supply and 100% of the energy needs for Alternative for the Americas (ALBA) members and Haiti.
(...) Further, Journal writers take aim at PDVSA demeaning it as a state-run company claiming it has "little focus" because Chavez turned it into a "poverty-alleviation ministry." As a result, the Journal says it became inefficient and its production fell from 3.1 million barrels a day when Chavez first took office in 1999 to 2.4 million barrels a day now according to US government Energy Information Administration (EIA) figures that look to have been cooked to bring them down. They're disputable with differing ones coming from alternate sources including the 2006 CIA World Factbook listing Venezuela's daily production at slightly under 3.1 million daily barrels, around the same figure PDVSA reported then including extra-heavy crude from Orinoco belt production. In May, 2006, Venezuelan Minister of Petroleum and Energy, Raphael Ramirez indicated the International Energy Agency (IEA) recognized the nation's daily oil production at over 3 million daily barrels while the government reports it now at 3.3 million compared to 2.6 million or less claimed by international oil analysts and EIA deliberately understating oil output the way Washington and the West distort everything positive about Venezuela under Hugo Chavez.
(...) All it can say, with a heavy-handed dose of sour grapes, is that "Mixing oil and politics may not help Mr. Chavez in the long run" as he'll need "private companies' expertise to develop the heavy crude in the Orinoco region" without ever conceding he already has it and a long line of takers ready to step in if any now there foolishly leave. They won't, but don't expect to see that opinion reported anywhere in the Wall Street Journal as they'd then have to admit everything they wrote earlier was false and misleading. They don't have to. You just read it here.

corruption, oil, iraq:
Rumors are rife among suspicious Iraqis about the failure to measure the oil flow. "Iraq is the victim of the biggest robbery of its oil production in modern history," blazed a March 2006 headline in Azzaman, Iraq's most widely read newspaper. A May 2006 study of oil production and export figures by Platt's Oilgram News, an industry magazine, showed that up to $3 billion a year is unaccounted for.
(...) "Iraqi oil is regularly smuggled out of the country in many different ways," an oil merchant in Amman told the Nation (U.S.) magazine last month. "Emir al-Hakim [the head of the Supreme Council of the Islamic Revolution in Iraq] is spending all his time in Basra selling oil as if it were his own. People there call him Uday al-Hakim, meaning he is behaving the same way Uday Saddam Hussein was acting. Other merchants like myself have to work through him with the big deals or smuggle small quantities on our own. The petroleum is now divided among political parties in power."
(...) Saddam was accused of selling some $5.7 billion worth of petroleum products on the black market over the six years of the Oil-for-Food program while United Nations inspectors turned a blind eye. Today, his successors stand accused of similar abuses.
(...) Iraq sits on 115 billion barrels of proven oil reserves, the third largest in the world (behind Saudi Arabia and Canada). From a society that once used its oil revenue to create a social welfare state that provided education, health care and social services, the country has plummeted into the ranks of the poorest countries of the world.
(...) Almost four years after the DFI was created, officially logged crude sales have generated more than $80 billion. The U.S.-led Coalition Provisional Authority (CPA) managed the DFI from the immediate aftermath of Saddam's removal until June 28, 2004, when the CPA was disbanded. During those 14 months, the CPA spent $19.6 billion of Iraq's DFI funds. The three succeeding governments have been officially in charge of the DFI revenues, although the influence of the U.S. military and political advisors has remained significant throughout. In the 32 months after the CPA left, the three governments spent $47 billion more.
(...) In January 2004, under project Restore Iraqi Oil II (RIO II), the Bush administration contracted with Halliburton to fix southern Iraq's oil fields and with Parsons to handle the northern fields. The two companies were supposed to be supervised by yet another contractor, New Jersey-based Foster Wheeler. (The first RIO contract was the infamous, secret no-bid contract issued to Halliburton before the invasion of Iraq. Although RIO II was competitively bid, Sheryl Tappan, a former Bechtel employee wrote a book criticizing the award as unfair.)
(...) Halliburton and Parsons have long histories in Iraq, going back more than 40 years. Brown & Root, which is now part of Halliburton , began work in Iraq in 1961, while Parsons dipped into Iraq's oil sector in the 1950s. Foster Wheeler dates its work in Iraq to the 1930s.
(...) Neither US officials nor contractors have provided good reasons why, four years into the US occupation, the meters have not been calibrated, repaired, or replaced. One excuse is that the job of calibration requires special devices to assess the current meters and security issues make importing these devises problematic. Yet that and other security-related explanations fall apart given that the oil terminals are under 24 hour high security guard, lie more than 50 miles off-shore, and are accessible only by helicopter or ship.
(...) There are two possible explanations: that the project has been delayed by bureaucracy or that vested interests benefiting from the lack of oil metering (such as smugglers or corrupt officials) have prevented the project from moving forward.
(...) But despite not starting work until November 2004, the company charged the government millions of dollars for engineers who sat idle. Halliburton 's $296 million bill included at least 55 percent overhead. (In an estimate due later this month, SIGIR may predicts even higher overhead costs.)
(...) A Parsons joint venture (with Worley of Australia), was also issued a contract in January 2004, given detailed task orders in June, and started work in July 2004. It has also been accused of charging high overhead costs while idle, although not as much as Halliburton . SIGIR estimate pegs its overhead at 43 percent.

nigerian delta:

"Our resources, as you know, they are spoiled by the government," says Mr. Tom, a militant commander, meeting a pair of reporters in a camp of ramshackle tents, surrounded by his personal bodyguards. "Everywhere in the Delta, we are suffering. All the promises, and they do nothing. We want schools, we want them to employ our people, we want lights and water, all those things. It is for this that we are fighting, for our freedom."
(...) "People have realized their votes don't count," says Anyakwee Nsirimovu, director of the Institute of Human Rights and Humanitarian Law in Port Harcourt. "For the past nine months, people have been distancing themselves from the militants, but what does [Nigerian President Olusegun] Obasanjo do? He gives poverty instead of development. He gives bullets instead of bread. People realize these guys with guns are more effective, and sympathy is being built. And what do you get? Chaos."
(...) "People are so upset, and if the elected officials take office, then there will be more and more people, especially the youth, that will start going after officials," he says. "People can't accept the ballot, and [they] will start to use self-help – the AK-47 – against the politicians who do not care about them except at election time."
(...) On paper, a bustling region like the Niger Delta should be prosperous. The gross domestic product of the three top oil-producing states – Rivers, Delta, and Bayelsa – are equal to that of a growing central European country like Croatia. The annual budget of Rivers State alone – at more than $1.3 billion – is larger than the national budgets of many African countries.
(...) Militant groups say that they no longer trust in government promises or even in completed projects. "We are not interested in schools and clinics and the like," writes Jomo Gbomo in an e-mail. Mr. Gbomo claims to speak for the militant group MEND and has helped journalists arrange visits with MEND in the past. "We are demanding control over our resources."
(...) "We are stranded here," he says. "There are no factories where our boys can go work. We used to fish, but our fish are being poisoned by the pollution coming from these refineries." He sighs. "If you box me, what am I going to do? I must fight. That is what is happening. It's not a thing we want to do, it's because of frustration."
(...) "The problem is that our refineries are not working to capacity, so we can only turn 300,000 barrels per day into diesel or petrol for domestic consumption," says Fingesi, who quit his government job in 2003 because of death threats. "So then Nigeria has this excess crude that it cannot sell, and the only way to sell it is illegally. 1.6 million barrels a day, at $65 per barrel, you're talking $100 million a day, and none of it goes into government coffers."
(...)

ujp on the democrats bill:
The anticipated veto of the Iraq war funding bill demonstrates the extent of White House extremism. Bush is not rejecting a "bring all the troops home and end the war" bill but rather rejecting a compromise bill that would provide $100 billion to continue the war, would set only a "goal" of removing some troops by March 2008, would allow 60-80,000 troops to remain indefinitely, would not restrict a U.S. attack on Iran, would allow the 100,000+ U.S.-paid mercenaries in Iraq to continue with only insignificant restrictions, would require Iraq to accept a new oil bill, and would allow Bush to ignore suggested requirements for adequate training, equipping and rest of U.S. troops.
(...) More significantly, like the earlier draft the bill exempts from the "redeployment" four categories of troops which together could constitute up to 60,000-80,000 troops. They include training, counter-terrorism, and protection of U.S. diplomatic positions (such as the huge Green Zone) and personnel. It allows maintaining the over 100,000 mercenaries who back up U.S. troops in Iraq, calling only for 15% of the U.S. funding for mercenaries to be made contingent on certain benchmarks being met. Like the earlier bill it takes no steps to restrict the president's ability to attack Iran, and demands that the Iraqi government pass a new oil bill. (The oil bill under parliamentary consideration would not simply divide Iraq's oil wealth, the feature U.S. officials and media like to point to, but would privatize control of a huge proportion of Iraq's oil industry and resources in the hands of private international oil companies, with special privileged access likely for U.S. companies.) And like the earlier drafts it would allow Bush to simply announce his intention to ignore the Pentagon's own requirements regarding providing troops with adequate training, equipment, and rest between deployments.
(...) Congressmembers are not afraid that an end to funding, and thus an end to the war, will actually hurt the troops, but they are very much afraid of newspaper headlines and Sunday talk show hosts accusing them of abandoning the troops. There is a better chance that Congress could overcome its fear and thus make feasible this seemingly impossible scenario if the peace movement, speaking with and for the antiwar majority of the American people, maintains absolute clarity on our core demand to end ALL funding for the war. That includes opposition to all funding for the war regardless of rhetorical restrictions. Of course a decision to authorize $50 billion would be much less damaging than one authorizing $100 billion; but that does not mean we should support a bill authorizing $50 billion. Rather, our continued principled opposition to ANY funding for waging an illegal war will provide the best support to those in Congress who might be considering efforts to qualitatively reduce actual funding for the war, or to impose real and not just rhetorical restrictions on White House freedom to wage unlimited endless war. Congress is not the peace movement. It is an institution designed to make compromises; we help our friends most if we don't.

nationalizing oil in venezuela:
Newly bought Russian-made fighter jets streaked through the sky as Chavez shouted "Down with the U.S. empire!" to thousands of red-clad oil workers in the Orinoco River Basin, calling the state takeover a historic victory for Venezuela after years of U.S.-backed corporate exploitation.
(...) Chavez accused foreign oil companies of bad drilling practices due to their hunger for quick profits, and said Venezuela could sue them for causing lasting damage to oil fields.
(...) [however] The companies have leverage with Chavez because experts agree that Venezuela's state oil company, Petroleos de Venezuela SA, cannot transform the Orinoco's tar-like crude into marketable oil without their investment and experience.
(...) Nationalization of the oil industry has been tried in Venezuela before, though with a different tack. Venezuela shut companies out of the oil sector completely between 1976 and 1992 before beginning a series of partial privatizations, which Chavez is now rolling back. Chavez is also nationalizing electricity companies and the country's biggest telecommunications company, and has threatened to take over private hospitals if they continue raising prices for care. He says radical changes are needed to help the poor.
(...) [and the brilliant minds at the state department:] "I think he's digging a hole for the Venezuelan people," McCormack told reporters in Washington. "You can't take the shovel out of the man's hand. He just keeps on digging. And sadly, it's the Venezuelan people who are victimized by this."

sanctions to war to war-profiteering:
Iraq was simply and shamelessly robbed blind during the period of US-championed UN sanctions. Sadly, the robbery and mismanagement continue to this day, but now the figures are much more staggering.
(...) I reflected on my lengthy interview with Iraq's former Ambassador to the United Nations Mohamed Al-Duri. Al-Duri, being interviewed for the first time by English-language media since taking up his post at the UN, revealed to me in early 2001, in equally shocking detail, what sanctions had done to his country and people. He claimed that the UN was a key part of the problem. Led by two countries, the US and Britain, the UN Oil for Food Programme and the "humanitarian" mission it established in Iraq was reducing Iraqis to beggary, robbing the country blind and mis-managing funds, whereas the large bulk fuelled UN-related missions and operations, with needy Iraqi families receiving next to nothing. He spoke of the manipulation of Iraq's wealth for political purposes and alleged that the UN was a tool in the hands of the US government, aimed at encouraging widespread popular dissatisfaction with Saddam's government, before the country was dragged into war.
(...) By March 2003, when American forces invaded Iraq, the UN was generating $64 billion in sales of Iraqi oil, according to von Sponeck. But scandalously, only $28 billion reached the Iraqi people. If distributed evenly, each Iraqi received half a US dollar per day. According to UN figures, an individual living under one dollar per day is classified as living in "abject poverty". Even during the most destructive phases of the war with Iran, Iraq managed to provide relatively high living standards. Its hospitals were neither dilapidated nor did its oil industry lie in ruins. Only after the advent of UN sanctions in 1991 did Iraqis suffer with such appalling magnitude. Alas, the tyranny of Saddam Hussein expanded to become the tyranny of the international community as well.
(...) The UN Security Council's "elected 10 or veto-wielding five" had nothing for Iraq but "empty words," and there were "deliberate efforts to make life uncomfortable (for the Iraqis) through the Oil for Food Programme". All efforts to modernise Iraq's oil industry were blocked, said von Sponeck, at the behest of "two governments that blocked all sorts of items," necessary for even basic living -- again, the US and Britain, the same two that invaded and currently occupy Iraq. The logic in all of this is clear; the "pre- emptive" war on Iraq was but an extension of the sanctions regime.
(...) Von Sponeck reports that a large chunk -- 55 per cent of the money generated from Iraq's oil -- went to fund the UN's own inadequate "humanitarian" programmes. Much of the rest was usurped by the UN Compensation Commission, entrusted with handling damages claims made by those allegedly harmed by the Iraqi invasion of Kuwait. According to von Sponeck, the Iraqi oil "pie" was so large there was plenty for everyone: Kuwait, Jordan, Turkey, and all the rest. But most ironically, the commission awarded a large sum of money to two Israeli kibbutzim in the occupied Syrian Golan Heights, for allegedly losing some of their income due to the fact that the war damaged the tourism industry in Israel.
(...) The US Government Accountability Office uncovered appalling discrepancies in the US military administration's handling of money: uncountable billions went missing; hundreds of contractors fully paid but the work never done; layer upon layer of shady companies, mercenaries and sub-contractors (Halliburton and its subsidiary Kellogg, Brown & Root but mere illustrations). In partnership with the new rulers of Iraq, these corporations are stealing the wealth of the once prosperous nation, leaving it in shambles. And now, the Iraqis are facing enormous pressure to approve the Iraqi oil and gas law. The draft bill, according to Iraqi MP Nureddin Al-Hayyali, would give "50 per cent of the Iraqi people's oil wealth to foreign investing oil firms".

blood for oil (paul street):
Just as both sides of the Cold War possessed their own very different interests in incorrectly calling the Soviet Union “socialist,” both sides in the current U.S. war-funding and timetable debate have an interest in falsely describing the Congressional votes as “antiwar.”
(...) For their part, the Democrats wish to exploit the moral prestige of antiwar sentiment. Sixty percent of U.S. citizens oppose the increase of U.S. troop levels in Iraq. The occupation is now opposed by two-thirds of Americans. Nearly three fourths (72 percent) of Americans polled last year said that all U.S. in Iraq should come home by the end of 2006. Democrats rode this antiwar sentiment into Congressional majority power last November.
(...) The Democratic Congress has not exercised its power to end the war. It has not passed an antiwar bill.
(...) In the March 23rd House vote, all but eight of the Democrats (Dennis Kucinich, John Lewis, Barbara Lee, Maxine Waters, Diane Watson, Lynn Woolsey, Mike McNulty and Mike Michaud) basically gave Bush the money
he needs to continue and expand the wars in Afghanistan and Iraq and possibly to initiate an assault on Iran. If the Congressional bill was enacted tomorrow, without a Bush veto, it would fund Bush’s audacious, democracy-defying Surge (escalation) to the supplemental tune of $124 billion – considerably more than the White House actually requested.
(...) The distant troop withdrawal proposed by the House bill is hitched to the same Iraqi government “benchmarks” that Bush announced in his nationally televised escalation speech of January 10, 2007. The benchmarks for “withdrawal” include the passage by the Iraqi parliament of an imperialist, neoliberal petroleum law. Hidden beneath largely diversionary language about “revenue-sharing” across Iraq’s regions, this law will try to help subject Iraq’s stupendous oil reserves to domination by Western capital and the American Empire. The “withdrawal” envisioned by Congress would only remove combat troops and only on the eve of the 2008 elections. In the names of “diplomatic protection,” “counter-terrorism,” and the “training and advising of Iraqi Security Forces” (translation: OIL protection), it would leave U.S bases and forces in Iraq for an indefinite period. However much they claim to oppose permanent military bases in Iraq, leading Democrats within and beyond Congress imagine an American military presence in Iraq for decades to come.
(...) Saddest of all, perhaps, 90 percent of the House’s 71 Progressive Caucus voted for the supplemental authorization bill. This was a truly depressing “progressive” performance, one that speaks volumes about the absence of anything that deserves to be considered a relevant “Left” inside the narrow-spectrum U.S. political system.
(...) Deeply committed to the doctrinal notion that the U.S is an inherently noble, benevolent and democratic force in the world, top Democrats insist on combining their calls for (partial and qualified) “withdrawal” with preposterous and offensive claims that the U.S. has done everything it can “for the Iraqis.” As leading “Blue Dog” (right-wing) Democratic Rep. John Tanner (D-TN) told the Public Broadcasting System a few weeks ago:

“We…need to send a message to the Iraqis. Look, this has been four-plus years now, four years and three days. We have lost over 3,000 people. We have lost over 25,000 wounded. The Iraqis have had Saddam Hussein taken out. They have had two elections. They have had a government now for over a year. And we see no progress on them….it's time for them to step up. I am past the point of asking young military families in this country to continue to die and the American taxpayers to spend $2.5 billion a week in Iraq to help people who are seemingly unwilling or unable to get along. And, while they're shooting at each other, both sides are shooting at us.”

“I don't -- I think it's time for us not to be the policemen on the beat in the city of Baghdad. We're not talking about leaving the area. We're not going to leave the area. But I think that a timeline and a message to the Iraqis: Look, it's time for you people to get along. We're not going to stay here open-endedly, shedding our blood and our taxpayer money forever.”

(...)This by now standard Democratic Party rhetoric advances an interesting take on the U.S. assault on Mesopotamia four years after world history’s most powerful military state invaded that country, sacked its civil society, and essentially disbanded its state. The U.S. has deliberately provoked and fueled the very internal Iraqi factional and religious strife that leading Democrats cite as an example of Iraqis’ hopeless division.
(...) Top Democrats are just as committed as the Republicans to preventing what would amount to a geopolitical, world-systemic catastrophe for the American Empire: the loss of U.S. control over Middle Eastern oil. The notion of the people and/or states of that region doing whatever they wish with the remarkable, economically and geopolitically super-strategic oil that sits under the nominally sovereign soils – possibly even forming production and sales agreements with the Asian Security Grid (thereby accelerating the United States’ devolution to the status of a second-rate world power) – is anathema to the good Men and Women of Empire atop both wings of the U.S. Chamber of Commerce Party.
(...) [oil privatization details] Iraq’s oil wealth, by the way, is significantly greater than often assumed. Its proven reserves of 115 barrels make it the third largest oil state in the world (behind Saudi Arabia and Canada). But recent reports suggest that it may possess an additional 200 million barrels, making it home to one fourth of the world’s petroleum. Thanks to three decades of largely U.S-imposed chaos (war, sanctions, civic collapse, government dissolution and the like), moreover, Iraq’s spectacular oil reserves are remarkably “underdeveloped.” They are exceptionally “virginal” – close to the surface, and thus accessible for rapid and cheap extraction some day (A.K. Gupta, “Oil, Neoliberalism and Sectarianism in Iraq,” Z Magazine, April 2007)
(...) Next May, the Iraq National Assembly is likely to finalize petroleum legislation worked up by the Iraq cabinet in “consultation” with the White House, the world’s leading petroleum corporations (the “majors”) and the U.S.-based neoliberal consulting firm BearingPoint – the proud recipient of a $240 million federal grant to help create “a competitive private sector” in Iraq (Gupta, “Oil, Neoliberalism and Sectarianism in Iraq”)
(...) the final bill will certainly mandate “Production Sharing Agreements” (PSAs) that could (some day) confer astonishing profits on giant Western oil corporations at the expense of the Iraqi people and the Iraqi government. Currently used in relation to just 12 percent of the world’s oil reserves, PSAs leave ultimate oil ownership with the governments under whose soil petroleum sits. But they abolish the state’s monopoly over oil production, something that is more than sufficient to satisfy the profit lust of Western capital. Consistent with Standard Oil founder John D. Rockefeller’s famous managerial-capitalist maxim “own nothing, control everything,” PSAs reserve the oil industry’s leading profit centers – exploration and production – for private, generally multinational firms on terms that are highly favorable to those companies (see Antonia Juhasz, “Spoils of War: Oil, the U.S.-Middle East Free Trade Area and the Bush Agenda,” In These Times, January 2007).
(...) the “majors” and a number of other giant global firms will be permitted to recoup 60 percent or more of their Iraqi oil revenues during the initial “cost recovery” phase of militarily imposed Mesopotamian oil privatization. Profit rates will then fall to 20 percent, still double the PSA norm, with a special provision permitting transnational firms to “transfer any net profits from petroleum operations to outside Iraq.” Another part of the draft legislation requires any dispute between external oil corporations and the Iraq government to be resolved through international arbitration – something that will certainly favor Western (chiefly Anglo and U.S.) capital over “sovereign” Iraq.
(...) The draft law provides no guarantees for Iraqi state participation, requiring the Iraqi state oil company to compete against global firms for the right to explore and produce new oil fields in occupied Iraq. Depending on how relevant authorities interpret the draft law’s call for “the speedy and efficient development of the fields discovered but partially or entirely not yet developed,” the proportion of the Iraqi oil prize that could be open to neoliberal “privatization lite” ranges from two-thirds to one hundred percent. Not surprisingly, the official U.S. position is that none of Iraq’s oil fields are fully developed, something that will permit the big transnationals to move into any and all of the nation’s oil fields.
As the New York–based Global Policy Forum noted last year:

“According to oil industry experts, new exploration will probably raise Iraq’s reserves to 200+ billion barrels of high-grade crude, extraordinarily cheap to produce. The four giant firms located in the US and the UK have been keen to get back into Iraq, from which they were excluded with the nationalization of 1972. During the final years of the Saddam era, they envied companies from France, Russia, China, and elsewhere, who had obtained major contracts. But UN sanctions (kept in place by the US and the UK) kept those contracts inoperable. Since the invasion and occupation of Iraq in 2003, everything has changed. In the new setting, with Washington running the show, ‘friendly’ companies expect to gain most of the lucrative oil deals that will be worth hundreds of billions of dollars in profits in the coming decades. The new Iraqi constitution of 2005, greatly influenced by US advisors, contains language that guarantees a major role for foreign companies. Negotiators hope soon to complete deals on Production Sharing Agreements that will give the companies control over dozens of fields, including the fabled super-giant Majnoon. However, despite pressure from the US government and foreign oil companies, the current Iraqi government has not passed a national oil law” (Global Policy Forum, “Oil and Iraq,” http://www.global policy.org/security/oil/irqindx.Htm).

(...) [on democracy?] Washington’s close alliance with the arch-reactionary oil-rich state of Saudi Arabia and the administration’s sponsorship of an attempted coup against the popularly elected government of oil-rich Venezuela are two excellent examples – the Empire’s assertion that it is promoting democracy in Iraq is coldly contradicted by the curious fact that Iraq’s draft oil law has received input from the majors, the White House, the International Monetary Fund and BearingPoint, but NOT the Iraqi public.
(...) According to a 2006 poll, 76 percent of Iraqis think the real reason for the invasion was a U.S. desire “to control Iraqi oil.” Nobody who wishes to be a member in good standing of the U.S, political class can afford to “sound like” three fourths of the “liberated” nation’s people, less than 1 percent of who think the U.S. invaded to “export democracy.” As Chomsky likes to say, Orwell would be impressed.
(...) Meanwhile we continue to incredulously wonder “Why Do They Hate Us?” Yes, after we’ve “sacrificed” so much “blood and money,” as top Democrats like to say, so much “for them.”