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Thursday, July 24, 2008

Naomi Klein on Bush and Iraq Oil

This is excerpted from the Canadian Dimension blog.
There is little mention or discussion of these contracts in the mainstream media. But that is not surprising since the Iraq war is never supposed to be about oil. I hadn't heard about the management contracts. As I understand it the contracts are not yet signed so there could be political opposition before they are finalised as there has been to the Oil Law. The Oil Law benchmark is never mentioned any more!

NAOMI KLEIN: Well, I think we’re seeing the Bush administration in its final months just handing out a series of gifts to the oil and gas industry, both at home, pushing for opening up the Arctic National Wildlife Refuge, and then in Iraq, the prize, the biggest prize of all, which is allowing foreign multinationals to gain control of Iraq’s oil fields. And we’re seeing a two-stage process now, and it isn’t over yet, where first there was the service—the short-term service agreements, no-bid contracts, that were announced. They haven’t been signed yet, but they’re going to the big oil companies that were kicked out of Iraq in the ’70s. They’re coming back.AMY GOODMAN: Explain how that works, these no-bid contracts, how it is—who’s signing these contracts?NAOMI KLEIN: OK. Well, at the moment, Iraq does not have an oil law, so Iraq can’t sign long-term exploration agreements, although they are doing it in Iraqi Kurdistan, and we’ve heard about this with Hunt Oil. But that’s—those are illegal contracts. They’re very precarious. There could be future expropriations. It’s really risky to go that route, because there isn’t a law. And we know it’s been a major push of this administration to get the Iraqi parliament to accept a US-backed oil law. This has been sold as a symbol of Iraqi unity. That’s not the way it’s seen in Iraq.
In Iraq, the reason why it has been years in resisting this oil law is because nationalizing the oil in Iraq was the centerpiece of the anti-colonial struggle, as it was in neighboring nations throughout the Arab world. And it is not just a pro-Saddam idea. It is not just a Baathist idea. It’s the core of Arab nationalism. And that victory is being protected by many political forces in Iraq, and most notably by the oil workers’ unions in Iraq, who said, “We don’t need these foreign multinationals to get the oil out of the ground. We can do it ourselves. We can bring in technical support without giving away management control, without giving away ownership control.”
And, I mean, but let’s stress here that unlike the oil offshore, unlike the shale, this is very difficult oil to extract. It’s extremely—it requires a huge amount of technology. It requires a huge amount of investment. And that’s part of the problem with what the Bush administration is selling. These—actually, they—the oil companies need the price of oil to stay high in order for it to be economically viable to do these—to get oil out of solid rock, for instance, which is very hard, very expensive. Offshore oil drilling, also very, very expensive—you have to build the rigs and so on. Iraq, no. Iraq, stick a straw in the ground and suck. I mean, this is incredibly accessible oil. And Iraqis actually know how to extract this oil themselves. So this idea that they need these foreign multinationals to come in is yet another myth.
And not only have companies like BP and Texaco been offered these no-bid contracts, but what’s strange about it is that they’re service contracts, and these are not oil service companies. So what’s significant about these contracts is that they appear to be giving these oil companies the right of first refusal on future, more significant contracts. So, one week after these smaller service agreements were announced, the Iraqi Oil Ministry announced that they also will be handing out longer-term management agreements, which will give oil companies the ability to manage existing fields in Iraq and hold onto 75 percent of the worth of those contracts and leave only 25 percent for Iraqis, which is absolutely unheard of in the region, where 51 percent for the country is the baseline for new exploration, for new fields. These are existing fields. They’re already working. The technology is already there. And these foreign companies are going to be taking 75 percent of the worth of those existing fields in Iraq. So it’s daylight robbery. It’s armed robbery, actually, Amy.

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