THE
ROVING EYE US's Iraq oil grab is a done
deal By Pepe Escobar
"By 2010 we will need [a further] 50
million barrels a day. The Middle East, with
two-thirds of the oil and the lowest cost, is
still where the prize lies." - US
Vice President Dick Cheney, then Halliburton chief
executive officer, London, autumn 1999
US
President George W Bush and Vice President Dick
Cheney might as well declare the Iraq war over and
out. As far as they - and the humongous energy
interests they defend - are concerned,
only now is the mission really accomplished.
More than half a trillion dollars spent and perhaps half a
million Iraqis killed have come down to this.
On Monday, Prime Minister Nuri al-Maliki's
cabinet in Baghdad approved the draft of the new
Iraqi oil law. The government regards it as "a
major national project". The key point of the law
is that Iraq's immense oil wealth (115 billion
barrels of proven reserves, third in the world
after Saudi Arabia and Iran) will be under the
iron rule of a fuzzy "Federal Oil and Gas Council"
boasting "a panel of oil experts from inside and
outside Iraq". That is, nothing less than
predominantly US Big Oil executives.
The
law represents no less than institutionalized
raping and pillaging of Iraq's oil wealth. It
represents the death knell of nationalized (from
1972 to 1975) Iraqi resources, now replaced by
production sharing agreements (PSAs) - which
translate into savage privatization and monster
profit rates of up to 75% for (basically US) Big
Oil. Sixty-five of Iraq's roughly 80 oilfields
already known will be offered for Big Oil to
exploit. As if this were not enough, the law
reduces in practice the role of Baghdad to a
minimum. Oil wealth, in theory, will be
distributed directly to Kurds in the north,
Shi'ites in the south and Sunnis in the center.
For all practical purposes, Iraq will be
partitioned into three statelets. Most of the
country's reserves are in the Shi'ite-dominated
south, while the Kurdish north holds the best
prospects for future drilling.
The
approval of the draft law by the fractious
275-member Iraqi Parliament, in March, will be a
mere formality. Hussain al-Shahristani, Iraq's oil
minister, is beaming. So is dodgy Barnham Salih: a
Kurd, committed cheerleader of the US invasion and
occupation, then deputy prime minister, big PSA
fan, and head of a committee that was debating the
law.
But there was not much to be debated.
The law was in essence drafted, behind locked
doors, by a US consulting firm hired by the Bush
administration and then carefully retouched by Big
Oil, the International Monetary Fund, former US
deputy defense secretary Paul Wolfowitz' World
Bank, and the United States Agency for
International Development. It's virtually a US law
(its original language is English, not Arabic).
Scandalously, Iraqi public opinion had
absolute no knowledge of it - not to mention the
overwhelming majority of Parliament members. Were
this to be a truly representative Iraqi
government, any change to the legislation
concerning the highly sensitive question of oil
wealth would have to be approved by a popular
referendum.
In real life, Iraq's vital
national interests are in the hands of a small
bunch of highly impressionable (or downright
corrupt) technocrats. Ministries are no more than
political party feuds; the national interest is
never considered, only private, ethnic and
sectarian interests. Corruption and theft are
endemic. Big Oil will profit handsomely - and
long-term, 30 years minimum, with fabulous rates
of return - from a former developing-world
stalwart methodically devastated into failed-state
status.
Get me a PSA on time In
these past few weeks, US Ambassador Zalmay
Khalilzad has been crucial in mollifying the
Kurds. In the end, in practice, the pro-US Kurds
will have all the power to sign oil contracts with
whatever companies they want. Sunnis will be more
dependent on the Oil Ministry in Baghdad. And
Shi'ites will be more or less midway between total
independence in the south and Baghdad's dictum
(which they control anyway). But the crucial point
remains: nobody will sign anything unless the
"advisers" at the US-manipulated Federal Oil and
Gas Council say so.
Nobody wants to
colonial-style PSAs forced down their throat
anymore. According to the International Energy
Agency, PSAs apply to only 12% of global oil
reserves, in cases where costs are very high and
nobody knows what will be found (certainly not the
Iraqi case). No big Middle Eastern oil producer
works with PSAs. Russia and Venezuela are
renegotiating all of them. Bolivia nationalized
its gas. Algeria and Indonesia have new rules for
future contracts. But Iraq, of course, is not a
sovereign country.
Big Oil is obviously
ecstatic - not only ExxonMobil, but also
ConocoPhillips, Chevron, BP and Shell (which have
collected invaluable info on two of Iraq's biggest
oilfields), TotalFinaElf, Lukoil from Russia and
the Chinese majors. Iraq has as many as 70
undeveloped fields - "small" ones hold a minimum
of a billion barrels. As desert western Iraq has
not even been exploited, reserves may reach 300
billion barrels - way more than Saudi Arabia.
Gargantuan profits under the PSA arrangement are
in a class by themselves. Iraqi oil costs only
US$1 a barrel to extract. With a barrel worth $60
and up, happy days are here again.
What
revenue the regions do get will be distributed to
all 18 provinces based on population size - an
apparent concession to the Sunnis, whose central
areas have relatively few proven reserves.
The Sunni Arab muqawama
(resistance) certainly has other ideas - as in
future rolling thunder against pipelines,
refineries and Western personnel. Iraq's oil
independence will not go down quietly - at least
among Sunnis. On the same day the oil law was
being approved, a powerful bomb at the Ministry of
Municipalities killed at least 12 people and
injured 42, including Vice President Adel Abdul
Mahdi. Mahdi has always been a feverish supporter
of the oil law. He's a top official of the Shi'ite
party, the Supreme Council for the Islamic
Revolution of Iraq (SCIRI).
A whole case
can be made of SCIRI delivering Iraq's Holy Grail
to Bush/Cheney and Big Oil - in exchange for not
being chased out of power by the Pentagon. Abdul
Aziz al-Hakim, the SCIRI's leader, is much more of
a Bush ally than Maliki, who is from the Da'wa
Party. No wonder SCIRI's Badr Organization and
their death squads were never the target of
Washington's wrath - unlike Muqtada al-Sadr's
Mehdi Army (Muqtada is fiercely against the oil
law). The SCIRI certainly listened to the White
House, which has always made it very clear: any
more funds to the Iraqi government are tied up
with passing the oil law.
Bush and Cheney
got their oily cake - and they will eat it, too
(or be drenched in its glory). Mission
accomplished: permanent, sprawling military bases
on the eastern flank of the Arab nation and
control of some of largest, untapped oil wealth on
the planet - a key geostrategic goal of the New
American Century. Now it's time to move east, bomb
Iran, force regime change and - what else? - force
PSAs down their Persian throats.
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