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

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

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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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