Dec 13, 2006
You want to know why Bush is putting off a decision on the New Way Forward until next year? As I'm sure Vice President Cheney would put the issue, "The f***ing Iraqis haven't passed the oil law yet!!!"
The Iraqi parliament is supposed to pass a country-wide "oil law" this month, that will allow Big Oil Companies to begin signing contracts with the Iraqi government. But passing it is proving very difficult. The Shiites, Sunnis and Kurds can't agree on exactly what the law should look like. The Kurds are already signing contracts with Big Oil. No one is happy. This is a big deal.
Let's track this story through the back alleys of The Google; the New York Times sure as hell isn't reporting it.
The key piece of evidence is a news story from Dow Jones Newswires; and buddy, you don't get to see anything from Dow Jones Newswires. But you can get references to it. Let's start with a December 6th story in Schlumberger.
Iraq Draft Oil Law Recommends Production Sharing Deals
by Hassan Hafidh
Wed, Dec 6, 2006 11:14 GMTIraq's first postwar draft hydrocarbon law recommends the government sign production sharing deals and other service and buyback contracts to upgrade the country's war-ravaged oil industry.
The draft, a copy of which has been obtained by Dow Jones Newswires, states the Oil Ministry should set up a committee consisting of highly qualified experts to speed the process of issuing tenders and signing contracts with international oil companies to develop Iraq's untapped oil fields.
That was Dec. 6th. Passing the law is proving more difficult than the Iraqis, not to say Bush, Cheney and Baker, would have liked. Moving on to Dec. 9th.
Iraqi panel making progress in drafting new oil law
BAGHDAD: A government committee drafting a new law to resolve the politically charged question of distributing Iraq's oil wealth has made significant progress, the panel's chairman said yesterday. The distribution of oil revenues, the mainstay of Iraq's economy, is at the heart of some of Iraq's most contentious political issues at present, including the push by Shiite leaders to allow the oil-rich south of Iraq to set up a self-rule region a similar to a Kurdish one in the north. "We have reached important agreements. I cannot put a timeframe on when it will be ready, but we are very keen on achieving that as soon as possible," Deputy Prime Minister Barham Saleh, a Kurd who chairs the committee, said. "We hope that we will reach a comprehensive agreement that will enhance the oil sector and make oil a unifying factor to all Iraqis." He said, however, that key issues still need to be resolved, including "the administration of the oil sector, deals and contracts." "We hope to reach an agreement that will please all parties," he said.
Can you imagine the state Bush, Cheney and Baker must be in???
Moving on to Dec. 12th, yesterday.
Al-Akhdar al-Ibrahimi, an Algerian diplomat and former special adviser to the U.N. secretary-general, said any talk of a weak central Iraqi government role in the oil sector will be a destabilizing factor in the country.
The parliament has not passed a federal oil law as the various factions inside the country disagree on how much control the central government should have over the oil resources and its revenues, and what role the regions should play.
While most of the oil production comes from the Shiite-controlled south, the semi-autonomous Kurdistan in the north has seen little violence and has begun signing contracts with oil companies to further explore the region.
This has led to a spat between the Kurdistan Regional Government and the central government, over whether the Iraqi Oil Ministry will recognize the contracts and who will control all future oil production.
And there ya go. That's why Bush is delaying a decision on what to do in Iraq. I will bet you any amount of mojo on it. The rest of this diary is just a couple of "larger picture" stories for background.
US staying the course for Big Oil in Iraq
By Pepe EscobarWashington at large and President George W Bush and Vice President Dick Cheney in particular may apply every contortionist trick in the geopolitical book to save their skins in Iraq - and the reasons are not entirely political.
-- snip --
Dow Jones Newswires reports [this is that same mysterious story I began with, I think] that the draft law stipulates that the Iraqi Oil Ministry "should set up a committee consisting of highly qualified experts to speed up the process of issuing tenders and signing contracts with international oil companies to develop Iraq's untapped oilfields".
-- backwards snip --
For Big Oil, the new oil law is the holiest of holies: once the exploitation of Iraq's fabulous resources is in the bag, "security" is just a minor detail. Enter the ISG's much-hyped provision of US troops remaining in Iraq until an unclear date to protect not the Iraqi population, but Big Oil's supreme interests. This is really what ISG co-head James Baker means by "responsible transition".
The Asia Times story is rather long; I recommend having a look if you're curious. Also have a look at this Financial Times piece from Dec. 7th.
From a global perspective, Iraq’s oil is becoming increasingly important to overall supply as demand accelerates, from China in particular, and output from fields in the US, Europe and parts of Asia slows with their advancing age. According to the International Energy Agency, the developed countries’ watchdog on the issue, Iraq would have to increase its oil production by 4.9 per cent each year until 2030 to meet the world’s oil demand, which is expected to jump to 116m b/d from 85m b/d.
-- snip --
The big groups are therefore seeking to prepare for the day when they will be able to enter Iraq, trying to create closer relationships with Iraqi officials and to gain information about oilfields in ways that do not require visits to the country. BP and Royal Dutch Shell agreed to provide free assessments of the geological, technical and other data on Iraq’s two main oilfields, Kirkuk in the north and Rumaila in the south. This has helped them catch up with competitors such as Total, which may have gained access to such data when they negotiated contracts with the Saddam regime. Others such as Chevron have forged relationships and gleaned information by organising training sessions for Iraqi engineers outside Iraq.
Any questions?
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