July 7th People's Independent Inquiry Forum -> New Law to allow West to Pillage Iraqi Oil

New Law to allow West to Pillage Iraqi Oil

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Bridget

Posted: Feb 28 2009, 03:35 PM

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Page last updated at 18:09 GMT, Thursday, 26 February 2009

Iraq open for business - Miliband

David Miliband declares Iraq "open for business"

Foreign Secretary David Miliband has declared Iraq "open for business" and a good place for UK firms to do business, during a surprise visit to the country.

After meeting his Iraqi counterpart, Mr Miliband told a press conference the UK was committed to investing in Iraq.

The UK-based Mesopotamia Petroleum Company has just agreed a �277m ($400m) joint venture to drill for oil in Iraq.

Mr Miliband is expected to visit British forces in Basra on Friday, as they prepare for withdrawal in July.

He will also meet Iraqi Prime Minister Nouri al-Maliki during his two-day visit, his first since April 2008.

UK forces have lost 178 troops since the 2003 invasion and currently have a 4,100-strong force in the country.

They handed over control of Basra airport, the main military base in southern Iraq, on 1 January and have been training the Iraqi army.

Britain will be a major investor in Iraq
David Miliband

UK Prime Minister Gordon Brown has said Britain's mission will be completed "by the end of May, or earlier" and withdrawal is scheduled by the end of July.

Mr Miliband told the press conference: "With the improving security situation... our relationship becomes one defined not just by defence and security but also by politics, by economics, by culture and by education."

The deal between the Mesopotamia Petroleum Company and Iraq's oil ministry will see 60 oil wells drilled per month, each producing 2,000 barrels of crude per day.

"This sends an important signal, not just to the people of Iraq about the long-term economic commitment of Britain to Iraq, but also... to British business [that] Iraq is open for business," said Mr Miliband.

Iraqi leaders recently invited foreign firms to invest in the oil-rich state as security improves.

Praise for Obama

Mr Miliband said a number of UK companies were already interested, not just within the oil industry but in sectors such as education.

"Britain will be a major investor in Iraq," he added.

Mr Miliband also praised US President Barack Obama's administration for its careful and "wholly appropriate" approach to pulling out troops.

Mr al-Maliki has said his country was not worried by Mr Obama's plans for an accelerated withdrawal, as the president prepares to announce a timeline for the process.

The Foreign Office said Mr Miliband's discussions with Mr al-Maliki were likely to focus on trade, education and cultural links, the Middle East peace process and human rights.

Students taking advantage of a UK-funded scholarship scheme to help bright Iraqis attend university in Britain will also talk to Mr Miliband about the scheme.

Collusion claims

Mr Miliband's visits comes after senior figures including French President Nicolas Sarkozy and German Foreign Minister Frank-Walter Steinmeier also visited the country this month.

He arrived in Iraq as the UK government faced claims of collusion with US authorities by handing over terror suspects in the country.

Defence Secretary John Hutton said two men detained in 2004 were transferred to US custody and then transported to Afghanistan for questioning.

The government had previously insisted Britain had no direct involvement with these "extraordinary rendition" flights.

Mr Hutton apologised for past incorrect answers given to MPs. Mr Miliband last year admitted two rendition flights had landed to refuel on UK territory in 2002.

Bridget

Posted: Jun 19 2009, 09:43 AM

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Iraqi Oil Minister accused of mother of all sell-outs

To public fury, the country is handing over control of its fields to foreign companies

By Patrick Cockburn in Baghdad

Thursday, 18 June 2009
The Independent

An employee works at Tawke oil fields in the Kurdish region in northern Iraq on Sunday

Furious protests threaten to undermine the Iraqi government's controversial plan to give international oil companies a stake in its giant oilfields in a desperate effort to raise declining oil production and revenues.

In less than two weeks, on 29 and 30 June, the Iraqi Oil Minister, Hussain Shahristani, will award service contracts to the world's largest oil companies to develop six of Iraq's largest oil-producing fields over 20 to 25 years.

Senior figures within the Iraqi oil industry have denounced the deal. Fayad al-Nema, the director of the South Oil Company, which comes under the Oil Ministry and produces most of Iraq's crude, said on the weekend: "The service contracts will put the Iraqi economy in chains and shackle its independence for the next 20 years. They squander Iraq's revenues." Mr Nema is reported to have since been fired because of his opposition to the contracts, which he says is shared by many other officials in Iraq's state-owned oil industry.

The government maintains that it is not compromising the ownership of Iraq's oil reserves � the third largest in the world at 115 billion barrels � on which the country is wholly dependent to fund its recovery from 30 years of war, sanctions and occupation.

But the fall in the oil price over the past year has left the government facing a financial crisis; 80 per cent of its revenues go to pay for salaries, food rations and recurrent costs. Little is left for reconstruction and the government is finding it hard to pay even for much-needed items such as an electrical plant from GE and Siemens.

The development of Iraq's oil reserves is of great importance to the world's energy supply in the 21st century. They may be even larger than Saudi Arabia's, as there was little exploration while Iraq was ruled by Saddam Hussein. International oil companies are desperate to get their foot in the door.

"Everyone wants to be in Iraq," says Ruba Husari, an expert on Iraqi oil. "Together with Iran, this is the only oil province in the world that has great potential. It is a great opportunity for oil companies because nobody knows the size of Iraq's reserves. Iraq itself needs to know what is under its soil."

But Iraqis are wary of the involvement of foreign oil companies in raising production in super giant fields like Kirkuk and Bai Hassan in the north and Rumaila, Zubair and West Qurna in the south. They suspect the 2003 US invasion was ultimately aimed at securing Western control of their oil wealth. The nationalisation of the Iraqi oil industry by Saddam Hussein in 1972 remains popular and the rebellion against the service contracts has been gathering pace all this week.

Parliament is demanding that bidding be delayed. MPs summoned Mr Shahristani, a nuclear scientist imprisoned and tortured under Saddam Hussein, to answer questions about the service contracts and the fall in Iraq's oil production and exports. Jabir Khalifa Kabir, the secretary of parliament's oil and gas committee, says the contracts will "chain the government with complex contractual terms" and will abort South Oil Company's own plans to raise production. The government says the bidding must go ahead.

The contracts are not particularly favourable to the international oil companies. They are rather the outcome of the companies' extreme eagerness to get into Iraq and the government's attempt to obtain expertise and investment without ceding control. The companies will be paid a fee linked to first restoring and then increasing oil output. They will, however, have greater control when there is a second round of bidding for oilfields which have been discovered but not yet developed. Separate again is the question of exploration for as yet undiscovered oil reserves.

Critics of the deal in parliament say that Iraq has already invested $8bn (�4.9bn) in developing its super giant fields. But Mr Shahristani needs $50bn over the next five or six years to raise current production levels from 2.5 million barrels a day of crude and knows the money and expertise can only come from outside Iraq.

The government in Baghdad may be near broke but Iraqis ask whose fault that is. The Oil Ministry, like much of the government, is dysfunctional when it comes to carrying out long-term projects. Mr Shahristani is blamed for poor management skills, though he eloquently defends himself by saying that when he took over the ministry in 2006, he had to cope with attacks by guerrillas who once were blowing up a pipeline every day.

This explains Mr Shahristani's problems in northern Iraq, where the Sunni Arab insurgency of 2003-08 was strong, but not in the far south, where the Shia community is dominant and there was no uprising.

Jabbar al-Luaibi, the former head of the South Oil Company, who battled to maintain oil production in these years, gave a devastating interview detailing the failings of the Oil Ministry to provide the most basic equipment needed to monitor the oil reservoirs.

"It's like driving your car without any indicators on the dashboard," he said, adding that if mismanagement continued in the same way as in the past "who knows, we might have to start importing crude oil".

The Iraqi government made two other mistakes for which it is now paying. It optimistically believed the price of oil would stay high at $140 a barrel. Instead of investing extra revenues by paying for outside expertise and equipment to raise production in the oilfields, it spent the money on raising the pay of government employees and increasing their number.

This increased Prime Minister Nouri al-Maliki's popularity in the provincial elections in January but left the government short of cash when oil prices collapsed. Prices have risen since then, but not nearly enough to solve the government's problems.

In June 2008 the Iraqi oil industry seemed poised to receive foreign help by signing two-year technical support contracts with oil companies. Control would have remained with Iraq. However, at the last minute, the contracts were cancelled despite being supported by Mr Shahristani and the council of ministers. The reason why this happened explains much about why the state machine is unable to carry out long-term policies. Jobs are allocated to members of political parties regardless of their experience or abilities. After 2003 the Oil Ministry had been the fief of the Fadhila, a Shia Islamic party strong in Basra, and, though it left the government, it never wholly accepted Mr Shahristani as minister.

Showing a certain cheek, Fadhila members � having sabotaged the plan to acquire foreign expertise when money was available to buy it last year � now criticise the government for being forced to accept worse terms because it cannot invest itself.

Many Iraqis will be angered to see their historic oilfields being partially run by foreign companies. But the government believes it has no choice.

Bridget

Posted: Nov 4 2009, 01:39 PM

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QUOTE

Iraq Signs Contract to Develop Oil Field

By TIMOTHY WILLIAMS
Published: November 3, 2009

BAGHDAD � Iraq formally signed a contract with a consortium of foreign oil companies Tuesday to develop its largest oil field.

A partnership of British Petroleum and the Chinese National Petroleum Company signed a 20-year deal to develop the Rumalia field in southern Iraq, which contains about 17.8 billion barrels of oil.

The field currently produces about one million barrels per day, but the companies plan to increase production to 2.85 million barrels per day within six years.

Rumalia had been the only oil field awarded during an auction of Iraq�s best fields in June.

But earlier this week, Iraq signed an initial oil agreement on the 4.1 billion barrel Zubair oil field with a consortium of Eni, an Italian oil company, the United States-based Occidental Petroleum, and the Korea Gas Corporation from South Korea.

Iraq is also negotiating with foreign companies to develop the West Qurna field, which has 8.6 billion barrels of oil.

source

Bridget

Posted: Nov 11 2009, 12:28 PM

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The plunder of Iraq�s oil
11 November 2009

The awarding of development rights over the huge West Qurna oilfield in southern Iraq to Exxon-Mobil and Royal Dutch Shell last Thursday once again underscores the criminal character of the continuing US-led occupation. As the direct result of the Iraq war, major American and other transnational energy conglomerates are now gaining control over some the largest oilfields in the world.

West Qurna has proven reserves of 8.7 billion barrels of oil. Iraq�s total reserves are currently put at 115 billion barrels, though dozens of potential fields have not been explored adequately. Before the US invasion in 2003, rights over West Qurna had been awarded by the Baathist regime of Saddam Hussein to the Russian oil firm, Lukoil. The pro-US puppet regime in Baghdad has torn up all pre-war contracts.

Exxon-Mobil is the first US-based oil giant to benefit. Under the terms of a 20-year contract, Exxon-Mobil and Shell plan to boost daily production at West Qurna from less than 300,000 barrels to 2.3 million barrels per day over the next six years. As well as the Iraqi government compensating the companies for the cost of upgrading the field�which may run as high as $50 billion�they will be paid $1.90 for each barrel extracted, or some $1.5 billion per year. Exxon-Mobil holds an 80 percent stake and Shell the remaining 20 percent.

The contract is only the second signed by the Baghdad regime with foreign energy companies. Last Tuesday, the Iraqi government concluded a deal with British Petroleum (BP) and China National Petroleum Corp (CNPC), giving them development rights to the massive Rumaila field and its reserves of 17 billion barrels. BP holds a 38 percent stake and CNPC, a 37 percent share. The plan is to boost production from around 1 million barrels per day to 2.85 million barrels, generating profits of over $2 billion per year.

The only disappointment for the transnationals is that the contracts are not based on the Production Sharing Agreement (PSA) model, which gives access to as much as 40 percent of an oilfield�s total revenue. Even the venal elements that make up the Iraqi government rejected handing over the country�s largest oil fields on such terms. Instead, the deals are classified as �service� agreements. This has enabled Prime Minister Nouri al-Maliki and his oil minister, Hussain al-Shahristani, to ignore parliament and the lack of a hydrocarbons law to govern the energy industry.

Further deals are in the process of being finalised. A consortium made up of the Italian company Eni, US-based Occidental and South Korea�s Kogas has signed a tentative agreement for the Zubair oilfield with reserves of 4 billion barrels. Eni, Japanese giant Nippon Oil and Spanish firm Repsol are bidding for a field in Nasiriyah which has similar-sized reserves. In northern Iraq, Royal Dutch Shell is negotiating a contract to develop untapped areas of the major Kirkuk oilfield, which is thought to have as much as 10 billion barrels in reserves despite being in production since 1934.

After initially demanding better terms, the energy companies are agreeing to deals to upgrade existing fields in the hope that they will better positioned when more lucrative contracts, on the PSA model, over 67 untapped fields are auctioned later this year or next year. While it has taken far longer than anticipated, the major energy conglomerates now calculate that Iraq is now sufficiently stable to begin pouring in money to vastly expand the country�s oil production. The first step has been taken in opening up the Iraqi oil industry, which was nationalised in 1975, to foreign investors.

Highlighting the neo-colonial nature of this operation, two former top American officials under the Bush administration are now facilitating corporate deals in Iraq. Jay Garner, the first head of the US occupation administration in Iraq following the invasion, is an advisor to the Canadian energy company Vast Exploration, which has a 37 percent stake in an oilfield in the Kurdish north. Zalmay Khalilzad, former ambassador to Afghanistan, Iraq and the UN, has established his own corporate consultancy firm in the Kurdish city of Irbil.

The US invasion and occupation of Iraq was always a war over energy resources. Over one million Iraqis have been slaughtered, millions more people maimed and traumatised, cities and infrastructure destroyed and tens of thousands of American soldiers killed or wounded to achieve American domination of Iraq�s vast oil reserves as part of its broader ambitions in the Middle East and Central Asia.

The US failed to achieve its wider regional objectives after the first Gulf War in 1990-91. The Hussein regime remained in place and despite continued UN sanctions was signing contracts with companies such as French oil giant Total and Lukoil. From the late 1990s on, Russia and the European powers were pressing for the lifting of sanctions to allow these companies to reap the benefits. War became the only means of preventing US corporate interests from being cut out.

American energy conglomerates were not passive bystanders. High-level representatives of Exxon-Mobil, Chevron, Conoco-Phillips, BP America and Shell took part in talks in early 2001 with the Bush administration�s �Energy Task Force� headed by Vice President Dick Cheney. One document prepared for the discussions included a detailed map of Iraq�s oil fields, terminals and pipelines and a list of the non-US foreign companies that were preparing to move in. A May 2001 report by the task force bluntly stated the US aim: �The Gulf will be the primary focus of US international energy policy.�

The September 11, 2001 terrorist attacks were seized upon to provide a pretext for war. The lies over Iraqi weapons of mass destruction were entwined with further lies about an Iraqi link to Al Qaeda. In the lead-up to the invasion, oil industry executives repeatedly met with Bush administration officials. As the Wall Street Journal commented on January 16, 2003: �US oil companies are starting to prepare for the day when they may get a chance to work in one of the world�s most oil-rich countries.�

Having drowned the Iraqi people in blood, the American financial and corporate oligarchy now believes that day has finally arrived. While US corporations are not the sole beneficiaries of the contracts, there is no question who has the final say over Iraq�s oil. With huge military bases in the country and a Baghdad regime tied to Washington, the US is positioned to dictate terms to its European and Asian rivals and, amid rising great powers tensions, to wield the threat of cutting off oil supplies�a longstanding tenet of American strategic policy.

James Cogan WSWS

Bridget

Posted: Nov 14 2009, 02:59 PM

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From The Times
November 13, 2009

Former US envoy Galbraith could earn $100m from Iraqi oil field

James Bone in New York

user posted image

Peter Galbraith

A prominent former United Nations official was forced to defend himself yesterday against accusations that he used his influence in Iraq to enrich himself.

Peter Galbraith, 58, a former US ambassador who recently quit as deputy head of the UN mission in Kabul, struck a potentially lucrative oil deal in Iraqi Kurdistan which could reportedly earn him $100 million (�60 million). He helped the Kurds to negotiate provisions in the 2005 Iraqi Constitution that gave them control over new oil finds on their territory.

�The Kurds did not give me anything,� he told The Times, describing the $100-million figure as �improbable�. �This was a commercial arrangement by a company which made its own judgment about what was an appropriate arrangement.�

Not public at the time was the fact that Mr Galbraith stood to profit from the provisions through his arrangement with a Norwegian oil company, DNO. Months later, DNO discovered the large Tawke oil field in northern Iraq. The disclosure of Mr Galbraith�s stake fuelled Iraqi complaints that influential people in the Western powers that launched the 2003 war were trying to take control of Iraq�s oil.

Feisal al-Istrabadi, a former Iraqi diplomat and legal advisor, said the revelation cast doubt on Iraq's fragile constitutional order.

�The idea that a foreign oil company was in the room drafting the Iraqi Constitution has me reeling,� he said. �It casts a tremendous pall on the legitimacy of the process. We do not let Shell draft the constitution of Nigeria.� Mr Galbraith acted as a go-between for the Norwegian oil company with the Kurdish regional government until its oil contract was signed in 2004. He continued to be paid by DNO while advising the Kurds in negotiations on the Iraqi Constitution.

�I was never negotiating the Iraqi Constitution,� he said. �The Kurdish leaders asked me for advice. That is an entirely separate matter from negotiating the Iraqi Constitution.� According to the Norwegian financial newspaper Dagens Naeringsliv, Mr Galbraith and a Norwegian partner, Endre Rosjo, each took a 5 per cent stake in the large Tawke oil field, which was discovered by DNO in December 2005. Mr Galbraith�s Delaware-registered company, Porcupine, is currently in dispute with DNO, however, and the matter is under arbitration in London.

DNO says that the arbitration followed a 2008 review by Kurdish authorities that barred certain third-party interests in oil fields in Kurdistan. �DNO has rejected the basis for any claims from such third parties, which relates to up to 10 per cent beyond DNO�s interest,� the company said.

�I have an arrangement with the company,� Mr Galbraith said. �I do not have a party interest in an oil field. I do not have an ownership interest in the oil field.He has been an influential advocate of the dismemberment of Iraq and the independence of Kurdistan.

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