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Posted by on May 3, 2007 in At TMV | 6 comments

Iraq’s Oil-Revenue Law Hits a (Shiite) Wall

iraq_oil_guard.jpg

In Iraq, as in life, if it’s too good to be true, then it probably is.

And so the much-vaunted draft of the national oil law has hit a wall with the news that Kurdish and Sunni officials now have deep reservations about it because of what appears to be Shiite chicanery:

A provision quietly slipped into the bill by the Shiite-controlled Oil Ministry that would cede control of nearly all of Iraq’s vast oil fields to a state-run (which is to say Shiite) oil company.

The draft law, which establishes a framework for the distribution of oil revenues, was already deeply flawed because it would mortgage the future of the state-owned oil industry to U.S. companies, including Exxon Mobil, Chevron and Shell, through Production Sharing Agreements. Under these PSAs, the companies would control all oil production from new Iraqi fields and reap a huge share of the profits for years to come.

The development is a setback for the White House, which has declared passage of the bill to be a major benchmark that shows progress in Iraq. But the smart money says that some sort of an agreement eventually will be hammered out because, when all is said and done, the war is all about oil.

For the moment, Iraqi parliamentarians seem less concerned: In a hard slap in the face to American troops, they plan to take a two-month recess this summer that coincides with the height of the much vaunted surge.

More here.

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Copyright 2007 The Moderate Voice
  • Good for the Iraqis. Passage of this oil law would be a very big mistake for the Iraqi people who should be reaping the benefit of the large oil reserves they are sitting on.

  • Chris may be right, but this is yet another ruinous moment for BushCo’s folly in Iraq. The surge may be a good idea to deal with the security problem, but without political reconciliation, we can surge and surge and surge – it won’t make any difference.

    The country also desperately needs economic progress.

  • Bones_708

    No offence but all I read was could and maybe. The post was very lacking in hard facts. Yes PSAs can be a way to rip a country off so the people see little of the money and politicians get rich off bribes and the companies get even richer off oil profits. It could also be a way to overhaul a collapsing production infrastructure, to modernize methods, and to get the most production in the shortest time. If they cut a good deal Iraq could see more money this way than by trying to continue production on their own short term. I don’t know that one is that much more likely than the other, so unless there is some facts to present about the deal, it seems to be a bit premature.

  • Bones:

    Click on the “deeply flawed” link in my post. That will take you to a longer and more comprehensive post and in turn to other links that may help fill out the issue for you.

  • Bones_708

    Yes I already did. While it is a longer post it still had no details of the deal in question. While it may very well turn out to be a horrible deal for the Iraqi people, there are no facts presented, none, relating to the PSAs.

    And “the war is all about oil”………… come on.

  • c woof

    Not only is the war all about oil– which it always was– remember the super-secret Chaney Energy task force meeting in early 2001? About the time that Bush appointed Chaney to be head of the Terrorism Task Force for the US (May 8, 2001)? Remember that? No? Look it up.
    Not only that, the surge is timed to correspond with any untoward reaction by the general Iraqi public to the knowledge of their oil having been given away. That is, if the Oil Bill the Bush Admin wants passes. However, so far, so good. Maybe there’s hope after all.

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