Iraqis face the dire prospect of losing up to $200bn
(£116bn) of the wealth of their country if an
American-inspired plan to hand over development of its oil
reserves to US and British multinationals comes into force
next year.
Is anyone surprised?
rkm
--------------------------------------------------------
http://www.twf.org/News/Y2005/1122-Oil.html
November 22, 2005
The Indpendent
IRAQ'S OIL: THE SPOILS OF WAR
By Philip Thornton, Economics Correspondent
Iraqis face the dire prospect of losing up to $200bn
(£116bn) of the wealth of their country if an
American-inspired plan to hand over development of its oil
reserves to US and British multinationals comes into force
next year. A report produced by American and British
pressure groups warns Iraq will be caught in an "old
colonial trap" if it allows foreign companies to take a
share of its vast energy reserves. The report is certain
to reawaken fears that the real purpose of the 2003 war on
Iraq was to ensure its oil came under Western control.
The Iraqi government has announced plans to seek foreign
investment to exploit its oil reserves after the general
election, which will be held next month. Iraq has 115
billion barrels of proved oil reserves, the third largest
in the world.
According to the report, from groups including War on Want
and the New Economics Foundation (NEF), the new Iraqi
constitution opened the way for greater foreign
investment. Negotiations with oil companies are already
under way ahead of next month's election and before
legislation is passed, it said.
The groups said they had amassed details of high-level
pressure from the US and UK governments on Iraq to look to
foreign companies to rebuild its oil industry. It said a
Foreign Office code of practice issued in summer last year
said at least $4bn would be needed to restore production
to the levels before the 1990-91 Gulf War. "Given Iraq's
needs it is not realistic to cut government spending in
other areas and Iraq would need to engage with the
international oil companies to provide appropriate levels
of foreign direct investment to do this," it said.
Yesterday's report said the use of production sharing
agreements (PSAs) was proposed by the US State Department
before the invasion and adopted by the Coalition
Provisional Authority. "The current government is
fast-tracking the process. It is already negotiating
contracts with oil companies in parallel with the
constitutional process, elections and passage of a
Petroleum Law," the report, Crude Designs, said.
Earlier this year a BBC Newsnight report claimed to have
uncovered documents showing the Bush administration made
plans to secure Iraqi oil even before the 9/11 terrorist
attacks on the US. Based on its analysis of PSAs in seven
countries, it said multinationals would seek rates of
return on their investment from 42 to 162 per cent, far in
excess of typical 12 per cent rates.
Taking an assumption of $40 a barrel, below the current
price of almost $60, and a likely contract term of 25 to
40 years, it said that Iraq stood to lose between £74bn
and $194bn. Andrew Simms, the NEF's policy director, said:
"Over the last century, Britain and the US left a global
trail of conflict, social upheaval and environmental
damage as they sought to capture and control a
disproportionate share of the world's oil reserves. Now it
seems they are determined to increase their ecological
debts at Iraq's expense. Instead of a new beginning, Iraq
is caught in a very old colonial trap."
Louise Richards, chief executive of War on Want, said:
"People have increasingly come to realise the Iraq war was
about oil, profits and plunder. Despite claims from
politicians that this is a conspiracy theory, our report
gives detailed evidence to show Iraq's oil profits are
well within the sights of the oil multinationals."
The current Iraqi government has indicated that it wants
to treble production from two million barrels a day this
year to six million. The US Energy Information
Administration said such an increase would ease "market
tensions" that have kept the price high. But governments
and oil companies in the West said the report was purely
hypothetical and that the issue was a matter for the Iraqi
people. They also pointed out that Iraq needed money to
rebuild in the sector.
A spokesman for the Foreign Office said the country's oil
industry was in desperate need of investment after years
of under-investment, UN sanctions, vandalism by Saddam
Hussein and more recent sabotage by insurgents and general
looting. "The Iraqi government has made it clear that the
decision is a matter for its authorities but they
understand that it would require a lot of investment," he
said. He said it was not surprising that Iraq should look
to outside experts to help rebuild an industry that was
the key source of revenue to help rebuild the country.
"We work closely with other departments such as the
Treasury to give assistance and advice," he said, adding
that the Foreign Office had not been involved in specific
lobbying.
Gregg Muttitt, of Platform, a campaign group that
co-authored the report, said Iraq had an existing - albeit
damaged - network of oil expertise and could use current
revenues or new borrowings to fund investment. The report
named several companies, including the Anglo-Dutch Shell
group, as jockeying for position before a new government
is elected. In 2003, Walter van de Vijver, then head of
exploration and production, said investors would need
"some assurance of future income and a supportive
contractual arrangement". The groupsaidyesterday that the
involvement of foreign oil companies would be determined
by the new Iraqi administration. "We aspire to establish a
long-term presence in Iraq and a long-term relationship
with the Iraqis, including the newly elected government."
No multinationals are operating in Iraq now because of the
poor security situation.
--
--------------------------------------------------------
http://cyberjournal.org
"Apocalypse Now and the Brave New World"
http://www.cyberjournal.org/cj/rkm/Apocalypse_and_NWO.html
Posting archives:
http://cyberjournal.org/cj/show_archives/?date=01Jan2006&batch=25&lists=newslog
Subscribe to low-traffic list:
•••@••.•••
___________________________________________
In accordance with Title 17 U.S.C. Section 107, this material
is distributed without profit to those who have expressed a
prior interest in receiving the included information for
research and educational purposes.
