Iraqi Cabinet gives green light for deals with Oil Giants.

This is from wiredispatch.
There is no mention of the new Oil Law that is stuck in parliament and was approved by cabinet about a year ago. This seems like a means of bypassing parliament and getting Big Oil involved more quickly. Note that the negotiations involve compensation from the Iraq Devlopment Fund that is controlled not by Iraq but by the US and UN!



Iraqi Cabinet Gives Green Light to Oil Ministry to Sign Deals With Oil Giants

SINAN SALAHEDDIN
AP News

Mar 05, 2008 06:44 EST

Iraq's cabinet has given the green light to the Oil Ministry to sign agreements with international oil companies to help increase the nation's crude output, a ministry official said Wednesday.



The two-year deals, known as technical support agreements, or TSAs, are designed to develop five producing fields to add 500,000 barrels per day to the country's 2.4 million barrels per day output.

Last December, Royal Dutch Shell PLC, BP PLC, ExxonMobil Corp. and Chevron Corp. submitted technical and financial proposals for the five fields and received counterproposals from the Iraqi side.

In January, representatives from the companies and Iraq met again in Amman, Jordan, and they will hold a third round of discussions later this month, said the official, who spoke on condition of anonymity because he was not authorized to release information.

In Vienna, Iraq's Oil Minister Hussein al-Shahristani said Iraq intends to compensate these companies with crude oil rather than in cash, the Dow Jones Newswires reported Wednesday.

Speaking to reporters as he arrived for a meeting of the Organization of Petroleum Exporting Countries, al-Shahristani said the Oil Ministry was still working on the compensation details with the Development Fund of Iraq, which is controlled by the United States and the United Nations.

Iraq's average production was 2.4 million barrels per day in January while exports stood at an average of 1.92 million barrels per day. December's exports averaged 1.81 million barrels per day.

The oil giants are among more than 70 international firms that met the ministry's deadline of Feb. 18 to compete to help develop Iraq's oil reserves, seen as vital to providing the funds to rebuild the shattered country.

Iraq is in dire need of expertise from international oil companies to achieve the Oil Ministry's target of 3 million barrels per day by the end of 2008. The country has been relying on a Saddam Hussein-era natural resources law until Parliament approves a new oil law to regulate the international oil companies' work and share Iraq's oil resources among the country's Shiites, Sunni Arabs and Kurds.

Source: AP News

Iraq oil dealings ongoing, met by protests.

This is from the Earthtimes. The Oil law one of Bush's main benchmarks is still stalled after almost a year. Meanwhile Kurds passed their own law. The meetings described in this article apparently are not of sufficient news value to make it into mainstream media news reports. I guess that is because the Iraq war is not supposed to have anything to do with oil. Shhhh!


Iraq oil dealings ongoing, met by protests
Posted : Wed, 06 Feb 2008 00:30:22 GMT
Author : General News Editor
LONDON, Feb. 5 Negotiations between international oil companies and Iraq Oil Ministry officials appear to be progressing, despite protests at a conference in London.Iraq is in direct talks with the world's largest oil companies and is prepping for a first round of bids to develop its oil fields. Iraq's reserves, the third largest in the world, are producing about 2.3 million barrels per day, and Iraq Oil Minister Hussain al-Shahristani said the direct talks will help boost that to 2.8 million bpd by the end of the year.The Middle East Economic Survey confirms widespread reports that top officials at Shell, BP, ExxonMobil and Chevron met last week in Amman with a delegation from Baghdad, led by Natiq al-Bayati, the Oil Ministry's director general of the Petroleum Contracts & Licensing Directorate.Shahristani said contracts will be signed "within a few weeks," MEES reports. The technical service agreements will dedicate expertise, training and equipment to a handful of Iraq's oldest and largest fields. Iraq has given a Feb. 18 deadline for any interested oil firms to pre-register to be considered for more extensive contracts to develop Iraq oil fields, which Shahristani said will be an open bidding and transparent process. It's expected to take place later this year.Oil companies are interested, as evidenced by continual discussions with the Oil Ministry over the past five years and the upcoming bidding round. But security and legal questions remain."It is a country of interest to us but we are waiting for political and security stability to return before we will take anything further," a BP spokesman told The Guardian, confirming the Jordan meeting."We are in the race so to say, we would like to work in Iraq," Shell Chief Executive Officer Jeroen van der Veer said last week, the Financial Times reports, "but the petroleum law is not ratified so we don't know the conditions. We would like to know the rules of the game."MEES quoted a source from one of the Big Oil firms that there are concerns on "rates of return, how these contracts are going to be structured, will they be honored. There are concerns over Parliament's reaction in the absence of a hydrocarbon law."The draft oil law is in a major holdup, however. The central and Kurdish regional governments dispute the extent of control over Iraq's oil sector. The Kurds are so frustrated they passed a regional oil law and have signed dozens of production-sharing contracts.Iraq's oil unions and civil society organizations around the world have taken the oil law to task for allowing contracts such as the PSCs, which they fear will lead to control over Iraq's oil by oil companies.A Middle East oil conference in London Tuesday, where Iraqi, British and industry oil leaders attended, was met by protesters who fear Iraq's oil wealth will be squandered.Copyright 2008 by UPI

Corporate oil giants scramble to plunder Iraq's energy reserves

This is from the World Socialist website. The oil law still seems stuck in parliament but the oil companies are making an end run around the missing law as this article shows. There still is improper metering of exported oil and no doubt much of it is going who knows where. I am surprised that the Oil Union goes along with the technical services contracts. Anyway under the Hussein law they are not recognised!

Corporate oil giants scramble to plunder Iraq’s energy reserves
By James Cogan
18 December 2007
When Iraqi Prime Minister Nouri al-Maliki finally sent the so-called “oil law” to be passed by the parliament in July, George Bush phoned to congratulate him personally. Maliki’s failure to push the legislation through had been a source of growing frustration and anger in Washington for more than a year. The law was needed to legitimise one of the main aims of the illegal US invasion of Iraq—to allow foreign corporations to assume control over the country’s state-owned energy resources on the most lucrative of terms.

Bush’s congratulations—made on behalf of the major oil corporations and their share-holders—were premature however. The rival Shiite, Sunni and Kurdish factions of the Iraqi ruling elite have still not agreed on the legislation due to their bitter and increasingly intractable differences over how to divide the revenues that would flow to the Baghdad government. Five months after the law was sent for ratification, it is still tied up in debates within a parliamentary committee, with few indications as to when, or in what form, it will be passed.

Faced with US demands for the opening up of the oil industry, the Maliki government, with Washington’s support, has turned to a desperate ploy to circumvent the parliamentary impasse. In a bizarre twist, US-based oil companies are being asked to invest in Iraq on contracts that legally rest on the pre-invasion laws of Saddam Hussein’s Baathist regime. The Baghdad government is offering transnationals what oil minister Hussain al-Shahristrani described to UPI (United Press International) earlier this month as “technical support contracts” over some of the country’s largest oilfields. These contracts involve corporations being paid to operate or manage oilfields, rather than having long term control or a share in the profits.

By contrast, the stymied oil law, which was largely ghost written by US oil interests, would legalise production sharing agreements (PSAs), a one-sided contractual arrangement that gives oilfield operators all revenues until they have paid their costs as well as a fixed ratio of all profits. Iraqi PSAs were expected to guarantee as much as 20 percent of all profits to the operating companies for terms as long as 30 to 40 years, while formally leaving “ownership” of the oil and gas in the hands of the “Iraqi people”.

Without PSAs, Steve Peacock, a representative of British Petroleum (BP), told Oil and Gas News Magazine last month that major companies would move into Iraq “if the terms compensate for the skills, tools and experience that international oil companies bring to the table”. Peacock stated: “There are many forms of contract that can find that sweet spot in the middle.”

The exact terms of the “technical support contracts” are not known. The extent of interest being expressed, however, suggests that the transnationals are being offered a very sweet deal, combined with the longer-term promise of a lucrative PSA once the new legislation is enacted. As well, they have been given a promise of industrial peace from the Iraqi Federation of Oil Unions, which had called strikes against the proposed oil law. The union has agreed to allow transnationals into the oil industry under the support contracts.

The focus of contract offerings is southern Iraq, where between 60-70 percent of the country’s proven oil reserves are located. The area is firmly under the political control of the Shiite parties that dominate Maliki government.

BP is seeking a contract for the major Rumailia field on the border of Basra and Kuwait, one of the country’s largest. Chevron and Total have done preparatory work to take over operations of the Majnoon field near the Iraq-Iran border. UPI’s sources indicate that ConocoPhillips is seeking a contract for the West Qurna field near Basra, which has reserves of some 14 billion barrels. ExxonMobil is looking at the Zubair field, also located near Basra.

Royal Dutch Shell and the Australian-South African corporation BHP-Billiton are seeking a contract in the Missan fields in Amara province. An Iraqi official told Oil and Gas News Magazine that Shell would be paid to “help in providing new techniques to increase production as well as buying equipment for the field’s redevelopment”.

The Bush administration and the Maliki government are both seeking to dramatically boost Iraqi oil production. Shahristrani, who is considered a political representative of the leading Shiite cleric Ayatollah Ali al-Sistani, outlined plans last month to increase oil production from 2.5 million barrels per day to at least three million by the end of 2008, and to six million within a decade.

The major oil companies would be the primary beneficiaries but a rise in production would also boost the ability of the Iraqi government to contribute to the upkeep of US occupation forces. As well, it would generate a substantial flow of wealth to the Shiite elite after decades of being marginalised by the former Baathist regime.

Controversially, companies are also seeking a role in the northern Kirkuk field, Iraq’s oldest and the subject of a bitter territorial conflict between the Baghdad government and the Kurdish Regional Government (KRG) which functions as an autonomous state in northern Iraq. According to UPI, Royal Dutch Shell has been conducting technical studies of the Kirkuk field since 2005 and wants a contract. Production is currently as low as 200,000 barrels per day, compared with an estimated potential output of a million barrels.

The KRG is demanding a referendum in Kirkuk province to decide if it will become part of the Kurdish region—which would give the KRG jurisdiction over the oil fields. Fearful that the central government will sign deals for the Kirkuk field, the KRG has denounced Shahristrani’s offerings of contracts under the old Baathist laws as illegitimate.

While denouncing Shahristrani’s offerings, however, the KRG is proceeding to sign its own contracts on the basis of a regional oil law passed unilaterally in August. At least 20 PSAs have been entered into with international oil companies to develop untapped oil fields in the Kurdish north. The KRG’s aim is to attract more than $10 billion in investment and push production in the north up to a million barrels per day over the next five years.

The US State Department has generally discouraged US-based firms entering into PSAs with the KRG. There are concerns throughout the Middle East that the development of the northern Iraqi oil industry would enable the KRG to gain sufficient economic and political clout to begin openly calling for the formation of a greater “Kurdistan” including Kurdish areas in Turkey, Syria and Iran. Turkey, in particular, has issued veiled threats it would militarily act to prevent Kirkuk oil coming under the KRG’s sway.

Shahristrani, on the behalf the Iraqi government, has labelled the Kurdish contracts as “illegal”. As a consequence, the world’s major oil companies have been reluctant to enter into arrangements with the KRG so as to not disrupt relations with the Maliki government and hinder their access to the southern oil fields.

The sordid wrangling between factions of the Iraqi elite underscores the fact that the various competing “oil laws” are to legitimise corporate profiteering on a vast scale under a US-led occupation that is completely illegitimate and illegal.