Nary a Fig Leaf

Naked colonialism : Iraq's new oil law: not even a figleaf
By Deirdre Griswold
Jan 24, 2007, 17:18

“By 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from? ... While many regions of the world offer great oil opportunities, the Middle East with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies.” -Dick Cheney, who was CEO of oil services company Halliburton, in a speech to the Institute of Petroleum in London- 1999

It hadn’t even been seen by Iraqi legislators yet, but details of a new “Iraqi” hydrocarbons law, drafted in reality by U.S. contractors, were revealed Jan. 7 in the Independent, a major London newspaper that has been critical of the Iraq war.

Once information about the leaked document got out, it was condemned around the world as an unprecedented giveaway to the multinational oil companies—in particular, those based in the U.S. and Britain.

“Its provisions are a radical departure from the norm for developing countries,” wrote the Independent. “[U]nder a system known as ‘production-sharing agreements,’ or PSAs, oil majors such as BP and Shell in Britain, and Exxon and Chevron in the U.S., would be able to sign deals of up to 30 years to extract Iraq’s oil.

“PSAs allow a country to retain legal ownership of its oil, but give a share of profits to the international companies that invest in infrastructure and operation of the wells, pipelines and refineries. Their introduction would be a first for a major Middle Eastern oil producer. Saudi Arabia and Iran, the world’s number one and two oil exporters, both tightly control their industries through state-owned companies with no appreciable foreign collaboration, as do most members of the Organization of Petroleum Exporting Countries, OPEC.”

Iraq has the third-largest proven oil reserves in the world

The article quoted Greg Muttitt of Platform, a human rights and environmental group that monitors the oil industry. “He said the new legislation was drafted with the assistance of BearingPoint, an American consultancy firm hired by the U.S. government, which had a representative working in the American Embassy in Baghdad for several months.”

Muttitt added: “Three outside groups have had far more opportunity to scrutinize this legislation than most Iraqis. The draft went to the U.S. government and major oil companies in July, and to the International Monetary Fund in September. Last month I met a group of 20 Iraqi MPs in Jordan, and I asked them how many had seen the legislation. Only one had.”

BearingPoint is based in McLean, Va., conveniently close to the CIA. Its most lucrative contracts come from the U.S. Agency for International Development, which has provided funding cover for many CIA activities in the past. According to a Jan. 14 article in the Independent, “Across the world, BearingPoint has become, thanks to USAID funding, a part of the U.S. government’s strategy of spreading free-market reforms to developing countries and America’s allies.”

Read the rest of it here.