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TechnoratiIraqis Resist U.S. Pressure to Enact Oil Law
BAGHDAD - It has not even reached parliament, but the oil law that U.S. officials call vital to ending Iraq's civil war is in serious trouble among Iraqi lawmakers, many of whom see it as a sloppy document rushed forward to satisfy Washington's clock.
Opposition ranges from vehement to measured, but two things are clear: The May deadline that the White House had been banking on is in doubt. And even if the law is passed, it fails to resolve key issues, including how to divide Iraq's oil revenue among its Shiite, Kurdish and Sunni regions, and how much foreign investment to allow. Those questions would be put off for future debates.
The problems of the oil bill bode poorly for the other so-called benchmarks that the Bush administration has been pressuring Prime Minister Nouri Maliki's government to meet. Those include provincial elections, reversing a prohibition against former Baath Party members holding government and military positions and revision of Iraq's constitution.
Republican leaders in Washington have warned administration officials that if the Iraqi government fails to meet those benchmarks by the end of the summer, remaining congressional support for Bush's Iraq policies could crumble. Their impatience was underscored Wednesday by Vice President Dick Cheney during a visit here.
"I did make it clear that we believe it's very important to move on the issues before us in a timely fashion, and that any undue delay would be difficult to explain," Cheney told reporters.
But Iraqi lawmakers show little sign of bending to accommodate Bush on an issue as crucial as oil.
"We have two clocks - the Baghdad clock and the Washington clock - and this is a perfect example," said Mahmoud Othman, a lawmaker from the semiautonomous Kurdish region of northern Iraq. "This has always been the case. Washington has been pushing the Iraqis to do things to fit their agenda."
Iraq is believed to have some of the world's largest oil reserves, about 115 billion barrels. The country's 2007 budget is based on predictions that oil proceeds will reach $31 billion, 93% of the government's revenue.
But war and political instability have kept production down. Just before the U.S.-led invasion in March 2003, production was 2.6 million barrels per day. U.S. officials predicted a rapid rise to 3 million barrels. Instead, Iraq often has struggled to push the daily total to 2 million barrels because of obsolete equipment and security problems.
The oil law is supposed to change this by opening the industry to foreign investors who could modernize equipment and increase production. U.S. officials hope that spreading oil profit fairly across the country would cause instability to ebb.
Iraq's cabinet, the Council of Ministers, approved a draft oil measure in February. From there, it was to go to parliament. U.S. officials predicted passage would be quick, but it has stalled.
The objections are as vast and technical as the measure itself and reflect the wider problems facing Iraq: regional distrust of the Shiite-led central government; wariness of foreign interest; and anger toward the United States, which many Iraqis believe invaded Iraq solely to get its hands on the oil.
Kurds object
The Kurdish regional government voiced its opposition to the measure last month after seeing lists drawn up by the Iraqi central government that categorized the oil fields according to levels of development and geographical boundaries. Those factors would determine who would manage the fields and the contracts involving them - regional authorities or the state-run Iraq National Oil Co., which has yet to be established.
Kurdish authorities say the lists gave 93% of fields to the national oil company, including some they say are at least partially in Kurdish territory. Their dissatisfaction has been made blazingly clear on the Kurdistan regional government website, which has posted the lists along with comments in red letters beside the sections they oppose.
"WRONG!" and "TOO BIG!" are common remarks.
Kurdish officials have said that unless the lists are redrawn, they will not support the bill. Kurdish parties control about one-fifth of the parliament.
Other points of contention, which have drawn in Sunnis as well as Shiites, involve the mechanism for distributing oil profit and the degree of foreign participation in a committee that would set policy on contracts and other industry issues.
None of those is clarified in the proposed legislation.
"Quite a lot of it is not good, to be honest," said a Western energy expert in Baghdad who spoke on the condition of anonymity to avoid angering Iraqi officials. "A lot of the difficult questions were fudged, like revenue sharing and who controls the oil fields. These obviously are vitally important, but they wanted a benchmark passed, so it was pushed," he said, referring to U.S. officials.
The question of how to divvy the money is especially troublesome because of Sunni Arab and Kurdish distrust of the Shiite-led government. Under the proposed law, the central government would control a bank account used for distributing oil proceeds.
"There were ideas that checks from the single oil account should have three signatures: one should be Sunni; one should be Shiite; one should be Kurd," said Zalmay Khalilzad, the former U.S. ambassador to Iraq who left the post in March.
Passing the measure "requires a very hands-on effort by the international community, by the United States," Khalilzad said. "This is the paradox of this situation. We have a greater sense of urgency because of our situation than they do."
The Western energy expert said Iraqi politicians estimate that a decision will take a few months or perhaps until the end of the year. "They say, 'Hang on, this is an important law, we're not just going to pass it,' " he said.
Foreign investment
Next to how to divide the money, the most contentious issue appears to be the role of foreign investment. The measure envisions profit-sharing agreements, which reward foreign contractors for doing business in risky environments.
Even those who support the proposal as a framework have reservations about the details.
"All in all, we need the new law. The existing ones are very old," said Haider Abadi, a member of Maliki's Islamic Dawa Party, a Shiite group. "Having said this, though, it does not mean that at this stage we are for a full opening of the doors to foreign investment in the oil sector."
Salim Abdullah Jabouri, a spokesman for the Sunni bloc, also expressed concern about having foreign companies profiting from Iraqi oil. "We think that the timing of this law is not suitable," he said.
Some of the fiercest opposition has come from oil workers, who threatened to go on strike this week to protest the legislation.
Imad Abdul Hussain, a leader of the Federation of Oil Unions, said workers want oil production to remain in government hands.
"Oil is Iraq's sovereignty. It is the only wealth in Iraq. It unifies Iraqis. When we give it to a foreign investor, this means the sovereignty is taken away," he said.
Energy experts, though, say Iraq has no hope of increasing production without foreign expertise and money.
Beyond all the political issues looms Iraq's most basic problem: security. The country may need help from outside investors, but "without security and a stable regime, none of this will mean much, because they won't come in," said Gal Luft, an energy expert at the Institute for the Analysis of Global Security, a Washington think tank that studies energy-related security issues.
There were at least 15 attacks on Iraqi oil facilities in the first three months of the year, according to the institute. They included slayings of oil industry workers and bombings of wells and the pipeline that carries oil from Baiji, in northern Iraq, to Turkey.
The number of attacks is lower than during the same period last year, but Luft said that is because saboteurs' favorite target, the pipeline, has been hit so many times that it rarely functions.
"They normally do not attack pipelines that are not in operation," Luft said.
susman@latimes.com
Copyright 2007 Los Angeles Times
29 Comments so far
Show Allpfutrell: Your cry for "one solution" is probably more widely felt than most of us know. For me the only possibility is Clean Elections followed by a third populist party of progressives. But vested interests will fight both of these with a ferocity that reveals their hatred. So how we get started and move onward are questions so thorny that they should be deferred until after completion of the indispensable precursor---IMMEDIATE FIERY EFFORTS TO FORCE IMPEACHMENT of Cheney, Gonzales, and other thugs.
Nancy Polosi speaks only for herself and for her own flawed reasons!
It's overwhelming, and frustrating, that the international corporations are calling the shots. (Although their "agents" are making a mess of their objectives and at the very least, there is some perverse form of justice to that.)
I wish I could dish up the one "solution" to this mess of the corporations deciding the priorities of our country, and through it, determining the fate of our world.
The only thing I can come up with is the very unsexy idea that our electoral process must be totally revamped from the ground up. And I'm not sure where we would begin that process.
I am absolutely convinced that we are not represented AT ALL. Our elections are totally bought, and our elected officials are bought also. Our government is too structurally crippled to solve any problem.
Does anyone else think that any ANY problem's solution must begin with that? If so, where do we begin?
I can only speculate, but I would think that a big part of the reason Cheney made his hurried and unexpected trip to Baghdad was to put pressure on Maliki to somehow force the oil law with PSAs through the Iraqi parliament, most likely threatening Maliki's life in the process. But Maliki does not have that much power and cannot shove this most important piece of the great oil robbery down the throats of the parliament. Maliki was not even able to avert the upcoming long vacation by the representatives. I would not want to be in Maliki's shoes.
How much expertise and financial help do the Iraq people to provide clean drinking water and minimal energy in a war free zone do they need?
Our help so far has been to support Saddam in war and oppression then oppose and invade to control and finally remove him. We have then installed a regime that can't find their ass with both hands and hangs on only with our massive disruption of their entire nation.
If we leave it could get worse. If we leave later will it be better? Every day we stay the situation gets worse so why will leaving later be any better?
I guess we should stay forever, that should work.
i wish susman and her editor at latimes could be sent the above messages. i know their stories will keep many americans ignorant, but not all.
they should be made to print this feedback.
anyway, so good to read you guys here.
Having difficulty looking at the krg.org
website now ("File does begin with %PDF"
when looking at the analysis and comments
on the annexes ??)
But when I was able to look at it earlier,
I read it as saying the Kurds WANTED PSA's
(patterned after the ones they were already
using). ???
And some of the comments on the annexes
did say "wrong Easting" (not WRONG!) and
TOO BIG! Almost all of these were in what
was called the Western Desert. I would
guess it is a matter of where boundaries
should lie. This article just seems to
have not presented the details accurately
(or in a misleading fashion.)
Last 4 years IMHO proved beyond any reasonable doubts that Operation Iraq Liberation was not simply for O.I.L. Instead, it was planned, executed and sustained for EXPENSIVE OIL PRICED and SOLD in USD to keep US in control of international financial system.
This is why Bu$h is still supported by the third of Americans, whose patriotism is measured in $$$.
the truth about the oil is starting to come out,.... despite the mainstream news. no wonder cheney is ln such a hurry.
I find this statement questionable "But war and political instability have kept production down. Just before the U.S.-led invasion in March 2003, production was 2.6 million barrels per day. U.S. officials predicted a rapid rise to 3 million barrels. Instead, Iraq often has struggled to push the daily total to 2 million barrels because of obsolete equipment".
Obsolete equipment that before the invasion was producing 2.6 million barrels per day?
Also the U.S. could solve many of the security problems, simply by leaving.
Both the Sunni's and Shite's have said that if the U.S. would leave they would come together to push Al-Queda out, which they consider like the U.S., to be nothing more then another foreign invader.
But right now the three The Sunni's the Shite's and Al-Queda have common enemy. The U.S.invaders.
I've seen other articles that say four companies in Big Oil will get up to 75% of the oil revenue, and for twenty to thirty years. What a scam on the Iraqis. Why weren't these figures mentioned in the article? Looks like Bu$hCo is trying to flim-flam them, doesn't it? Must think they're stupid or something. Just goes to show the contempt this administration has for heathen 'fur-ners'. What a warped sense of ethics, morals, and 'values'.
Sabotage, the most ancient of the tools of war.
Speaking of OIL, shouldn't we be doing a little complaining about the control of the US by the oil companies? You remember those guys who so conveniently wrote the legislation for Cheney and gang about oil and profit. You know the $50 plus that you filled up with that is feeding the exhorbitant and obscene quarterly profits of those nice fellas at Big All ! Shucks Howdy.
Congress might even speak up, what a concept...
If I were an Iraqi rock band, I would make an Arabic version of the Rolling Stones "Time is on My Side" and play that sucker over and over like a national anthem. Hunker down Iraqis! --it's your oil and you should receive the proceeds from its sale(as well as foot the bill for maintaining that infrastructure).
kittyladyoregon May 13th, 2007 3:14 pm
"The west has already taken over the Iraqi banking system. The original name for the illegal Iraq invasion was Operation Iraqi Liberation (OIL)."
kitty: I was unaware of the banking system takeover. That of course would make perfect sense if you want Iraqi oil to be purchased with U.S. Dollars and not Euro currency.
My goodness, don't we look altruisitic in this story! Those unrealistic, ungrateful Iraqis! Those words, "production sharing agreements" did slip off Tina Sussman's pen, but so innocuously, who could imagine what they really have in store for the Iraqis?
It's a disgrace that our press can't be honest about what we're really up to in Iraq.
The Iraqis need to give control of the profit of the oil to the US so that we (the US) can pay for the permanent military bases there. You can be sure that the Iraqis want to share the oil revenues with the US, and that they feel more secure that the US is building permanent military bases.
By the way, just as this war is not for oil, those permanent US military bases are to help the Iraqi people and is not part of an occupation.
so it goes
AG
My understanding is that foreign oil company representatives will actually sit on the Iraqi governmental board that will oversee oil production and administer the oil law. How's that for US respect for Iraqi sovereignty? How would US citizens feel about foreign representatives overseeing our resources?
This law will never pass, there is too much opposition and any legislator who votes for it will face the consequences.
The Cheney-Bush timetable for withdrawal from Iraq will begin when the oil fields there run dry. Once big oil gets their hands on Iraq oil, we will be there for the duration. That's why they're building those permanent U.S. bases in Iraq.. Why is it so hard for the media to accept the fact that this war has always been about oil?
The plan to steal Iraq's oil for the westerrn oil cartels is well documented in Greg Palasts' book "Armed Madhouse". Aalso the plans to steal everything that waasn't nailed down is listed too. The west has already taken over the Iraqi banking system. The original name for the illegal Iraq invasion was Operation Iraqi Liberation (OIL).
The insane act of the Bush administrations intended complicity in the premeditated theft of Iraq's sovereign resources by foreign OIL companies via a dodgy law written in Washington…..
Would have to be considered the greatest FRAUD in World History….
U S get your thieving hands out of Iraq, you have murdered hundreds of thousand of their people and destroyed their country. Isn't that enough already???
"There are no earthquakes."
This is incorrect. Iraq is affected by the Arabian triple junction and the fault system created by the Indian sub-continent's northward movement. Its quakes aren't as devastating as those in Turkey or Iran, but they are still affected by this very tectonically active region, which is why the oil's there in the first place.
The whole idea that Iraq's oil can only be retrieved with the help of the West's technical help is really, really funny.
Iraq's oil is probably the cheapest to extract, easiest to transport, simplest to sell oil in the world. That's why everyone wants it. They've got monster-sized deposits, located just a few feet under the surface. There are no mountains to cross. Deepwater ports are readily accessible, and they are open year-round. There are no earthquakes.
The only problem getting that oil to market is political: Who gets the profit? Iraq's citizens, or someone else?
Surely there are enough Iraqi experts who can deal with this issue, and they are not just text-book experts? And if there is foreign investment, it must be on Iraqi terms, in the interest of Iraq and Iraqis. Three cheers for the Federation of Oil Unions for doing everything to stop this grand theft of Iraq's natural resource - particularly at a time when Iraqis are suffering and dying, thanks to the very people who want to now steal their oil. May this never come to pass. The oil law can wait until Iraq is free from occupation, and when every Iraqi can take a part in the decision of how their oil needs to be dealt with.
The whole idea of splitting this into Sunni, Shia and Kurd is as old as history itself - divide and rule (and steal) is the trademark of all imperialists.
What a beautiful whitewash job this article truly is- Tom Sawyer would be proud. The benchmark/PSA's are nothing less than a total uberheist by the kleptocracy that we have grown to know and love these many many years. For the total mindboggoling inside skinny check out: Hard to Deny: Iraq is All About the Oil by Michael Schwartz www.alternet.org/story/51572- uh and be sure you're sitting down when you read it.
Interesting how so few journalists mention the Iraqi-written document, "Planning Iraq's Future: A Detailed Project to Rebuild Post-Liberation Iraq." Written by over 100 Iraqi academic, intellectuals, and other intelligent creatives, many of whom have now had to flee their land, it is intelligent and culturally appropriate.
Apparently, it was also sent to all members of Congress. How come so few journalists know about it? How come journalists have so little curiosity about Iraq and Iraqis in general and appear to harvest info from others exactly like themselves... maybe even sitting in the cubicle next door?
To see the report: http://www.motherspeak.org/Planning_Iraq_Future.pdf and see the http://raisingsand.blogspot.com (March 25) for more info.
It seems to me that one problem with this US oil legislation is that it pits Sunnis, Shia and Kurds against each other over how to divide oil revenues. The very concept that national revenues should be split along ethnic lines is meant to unnecessarily keep Iraq a divided country fighting amongst itself. Before the blockade and invasion, profits from oil went to building hospitals, schools and infrastructure. That's how it should remain. There is no reason except legerdemain and outright theft for the US to be telling Iraq how to manage its own natural resources. As this article illustrates, Iraqis will never let us steal their oil.
"Energy experts, though, say Iraq has no hope of increasing production without foreign expertise and money."
The author omits the fact that these "experts" are all from the West and connected to Big Oil. Iraqi oilpeople OTOH have said they can do the job themselves provided the "security" situation is resolved. Further, many have shown the PSAs in the draft clearly put Big Oil in charge in a very piratical fashion.
Together with the current petition by a majority of Iraqi MPs calling for a binding withdrawl timetable, the Oil Law "benchmark" will be shoved back in the face of Cheney/Bush, thus rendering their war of aggression a total failure.
There is a very fine in depth study of the benchmark/PSA question by Michael Schwartz, professor of sociology at Stony Brook, with an intro by Tom Engelhardt available at: www.tomdispatch.org- type in "The Prize of Iraqi Oil" on their search window. It's 7 pages and quite well worth the read- peace