The Iraqi cabinet’s largely US-written plan for sharing the country’s oil wealth among ethnic groups also gives unprecedented power to the global oil industry. The deal, which is scheduled for a vote by Iraqi lawmakers later this month, would give the major oil companies nearly unfettered access to Iraqi oilfields, with no requirements for even hiring Iraqis, much less sharing future oilfield development with the Iraqi government or Iraqi companies.
An analysis in the online Asia Times by Antonia Juhasz and Raed Jarrar looks deep into the details of the draft agreement–unlike U.S. coverage, which has focused on the political outcomes for Shiites, Sunnis and Kurds.
Here’s a key excerpt of the analysis:
The new oil law gives foreign corporations access to almost every sector of Iraq’s oil and natural-gas industry. This includes service contracts on existing fields that are already being developed and that are managed and operated by the Iraqi National Oil Co (INOC).
For fields that have already been discovered, but not yet developed, the proposed law stipulates that INOC will have to be a partner on these contracts. But for as-yet-undiscovered fields, neither INOC nor private Iraqi companies receive preference in new exploration and development. Foreign companies have full access to these contracts.
The exploration and production contracts give firms exclusive control of fields for up to 35 years, including contracts that guarantee profits for 25 years. A foreign company, if hired, is not required to partner with an Iraqi company or reinvest any of its money in the Iraqi economy. It’s not obligated to hire Iraqi workers, train Iraqi workers or transfer technology.
Iraq may have the world’s third-largest proven reserves of oil, but it’s on the verge of accepting a deal that other oil-producing nations would never consider. No matter how badly the Iraq War ends, Big Oil is likely to end up a winner.