NY Times Editorial: Whose Oil Is It, Anyway?

Whose Oil Is It, Anyway?

By ANTONIA JUHASZ
Published: March 13, 2007

TODAY more than three-quarters of the world’s oil is owned and controlled by governments. It wasn’t always this way.

Until about 35 years ago, the world’s oil was largely in the hands of seven corporations based in the United States and Europe. Those seven have since merged into four: ExxonMobil, Chevron, Shell and BP. They are among the world’s largest and most powerful financial empires. But ever since they lost their exclusive control of the oil to the governments, the companies have been trying to get it back.

Iraq’s oil reserves — thought to be the second largest in the world — have always been high on the corporate wish list. In 1998, Kenneth Derr, then chief executive of Chevron, told a San Francisco audience, “Iraq possesses huge reserves of oil and gas — reserves I’d love Chevron to have access to.”

A new oil law set to go before the Iraqi Parliament this month would, if passed, go a long way toward helping the oil companies achieve their goal. The Iraq hydrocarbon law would take the majority of Iraq’s oil out of the exclusive hands of the Iraqi government and open it to international oil companies for a generation or more.

In March 2001, the National Energy Policy Development Group (better known as Vice President Dick Cheney’s energy task force), which included executives of America’s largest energy companies, recommended that the United States government support initiatives by Middle Eastern countries “to open up areas of their energy sectors to foreign investment.” One invasion and a great deal of political engineering by the Bush administration later, this is exactly what the proposed Iraq oil law would achieve. It does so to the benefit of the companies, but to the great detriment of Iraq’s economy, democracy and sovereignty.

Since the invasion of Iraq, the Bush administration has been aggressive in shepherding the oil law toward passage. It is one of the president’s benchmarks for the government of Prime Minister Nuri Kamal al-Maliki, a fact that Mr. Bush, Secretary of State Condoleezza Rice, Gen. William Casey, Ambassador Zalmay Khalilzad and other administration officials are publicly emphasizing with increasing urgency.

The administration has highlighted the law’s revenue sharing plan, under which the central government would distribute oil revenues throughout the nation on a per capita basis. But the benefits of this excellent proposal are radically undercut by the law’s many other provisions — these allow much (if not most) of Iraq’s oil revenues to flow out of the country and into the pockets of international oil companies.

The law would transform Iraq’s oil industry from a nationalized model closed to American oil companies except for limited (although highly lucrative) marketing contracts, into a commercial industry, all-but-privatized, that is fully open to all international oil companies.

The Iraq National Oil Company would have exclusive control of just 17 of Iraq’s 80 known oil fields, leaving two-thirds of known — and all of its as yet undiscovered — fields open to foreign control.

The foreign companies would not have to invest their earnings in the Iraqi economy, partner with Iraqi companies, hire Iraqi workers or share new technologies. They could even ride out Iraq’s current “instability” by signing contracts now, while the Iraqi government is at its weakest, and then wait at least two years before even setting foot in the country. The vast majority of Iraq’s oil would then be left underground for at least two years rather than being used for the country’s economic development.

The international oil companies could also be offered some of the most corporate-friendly contracts in the world, including what are called production sharing agreements. These agreements are the oil industry’s preferred model, but are roundly rejected by all the top oil producing countries in the Middle East because they grant long-term contracts (20 to 35 years in the case of Iraq’s draft law) and greater control, ownership and profits to the companies than other models. In fact, they are used for only approximately 12 percent of the world’s oil.

Iraq’s neighbors Iran, Kuwait and Saudi Arabia maintain nationalized oil systems and have outlawed foreign control over oil development. They all hire international oil companies as contractors to provide specific services as needed, for a limited duration, and without giving the foreign company any direct interest in the oil produced.

Iraqis may very well choose to use the expertise and experience of international oil companies. They are most likely to do so in a manner that best serves their own needs if they are freed from the tremendous external pressure being exercised by the Bush administration, the oil corporations — and the presence of 140,000 members of the American military.

Iraq’s five trade union federations, representing hundreds of thousands of workers, released a statement opposing the law and rejecting “the handing of control over oil to foreign companies, which would undermine the sovereignty of the state and the dignity of the Iraqi people.” They ask for more time, less pressure and a chance at the democracy they have been promised.

Origionally published: http://www.nytimes.com/2007/03/13/opinion/13juhasz.html?_r=1&oref=slogin

Antonia Juhasz is the Ida Tarbell Fellow at Oil Change International (www.priceofoil.org), a Visiting Scholar at the Institute for Policy Studies (www.ips-dc.org), and a former Project Director at the International Forum on Globalization (www.ifg.org). She is also a Project Censored Award recipient and co-author of Alternatives to Economic Globalization: A Better World is Possible, 2 nd Ed. Her articles have appeared in publications such as The New York Times, The Cambridge University Review of International Relations Journal, and the Johannesburg Star. Her new book is The Bush Agenda: Invading the World, One Economy at a Time (Regan Books of Harper Collins Publishers, April 2006).

US Ambassador Apologizes to Iraqi Political Leader for Arresting Son

Abdul Aziz al-Hakim

U.S. troops detained the son of Abdul Aziz al-Hakim, who leads the Badr militia and the country’s largest Shiite party, the Supreme Council for the Islamic Revolution in Iraq.


The son, Ammar Abdel-Aziz Al-Hakim, is in his mid-30s and normally dressed in black turban and clerical robes, is an influential member of the ruling Shi'ite Alliance in his own right and is secretary general of a humanitarian charity set up by SCIRI. The SCIRI was founded in Iran in1982 and its continued links to Shi'ite Islamist Iran is a source of concern for Washington, which accuses Iran of fuelling violence in Iraq by supplying Shi'ite militias with weapons, funding and training.

The son, Ammar Abdel-Aziz Al-Hakim,was "released after an intervention by Iraqi Prime Minister Nouri Al-Maliki," Al-Iraqiya state TV said in a breaking news report. He had been arrested by US troops at the Iranian border,

Why he was arrested:

U.S. authorities have complained about Iranian weapons sales and financial aid to the two major Shiite parties in Iraq, especially the Mahdi Army of radical cleric Muqtada al-Sadr who is thought by the US to be in Iran now.

There has been a generations-long feud between their Abdul Aziz al-Hakim familiy and al-Sadr's family creating a major divide in the Shiite population. The feud and has carried over into a personal and political rivalry between the men, and their militias have periodically clashed.

Both Washington and Iraqi leaders have vowed that no independent militia would be exempt as a major security operation is under way in Baghdad.

Abdul Azizal Harkins (the father's) Political Opinion:

"We, as Iraqis and Shiites, are still being subjected to mass killings, kidnappings, displacement, destruction of infrastructure and attacks on mosques and holy shrines as well as other crimes committed by Saddamists, Bathists and their takfiri allies," the cleric Has explained.

"We, with deep regret, still hear fatwas by the takfiris that call for the killings of millions of Iraqis. Such edicts are being issued from inside Iraq by some foreigners who entered the country illegally and also by some evil clerics in neighboring countries," said the leader of the largest Shiite group, the Supreme Council for the Islamic Revolution in Iraq.

Al Hakim was apparently referring to Abdullah Bin Jabrain, a key members in Saudi Arabia's clerical establishment, who earlier this month joined a chorus of other hardliners who have deemed Shiites as infidels.

Al Hakim is in favor of setting up Federal Regions in Iraq to help stop sectarian violence between the Sunni"s and Shiites.

End Result:

U.S. Ambassador Zalmay Khalilzad said the arrest was being investigated but stressed that Washington did not mean any disrespect to al-Hakim or his family.

"I am sorry about the arrest," he said. "We don't know the circumstances of the arrest and we are investigating ... but he is being released."

Iraqi Education Minister Khodair al-Khozaei, a Shi'ite, condemned Hakim's arrest. "There will definitely be popular reactions," he told Dubai -based Al Arabiya television. "More than anybody else, it is the Americans who are violating the security plan through their cowboy methods," he said, referring to a major security crackdown launched this month in Baghdad.


The provincial council of the southern Shi'ite province of Najaf called for demonstrations on Saturday.

Condoleezza Rice in Baghdad

When the war was being planned Condoleezza Rice stood with the hawks when she was the President's security adviser. Some feel that she has metamorphosed into pragmatist with her move from the White House to the State Department. It was a pragmatic idea to make a surprise stop in Baghdad as the U.S. Senate deadlocked on whether to repeat a symbolic rebuke that the U.S. House handed Bush on Friday when it opposed the administration's deployment of additional combat troops to Iraq.


Her visit occurred a day after the U.S. House of Representatives renounced President George W. Bush's latest strategy to resolve the four-year-old war in Iraq, passing a nonbinding resolution that disapproves of his decision to send about 21,500 more U.S. troops to the conflict. Most of those troops are being dispatched to Baghdad.

The U.S. House vote was the strongest rebuke of a president during wartime since Congress in 1970 rescinded the Gulf of Tonkin resolution that authorized military action in Southeast Asia.

Bush's approval rating stands at 32 percent, tied for his lowest standing in Associated Press-Ipsos polling, and most people in the United States find fault with his handling of the nearly four-year-old Iraq war.

"Some do not think that this was the right war to fight, and others think that we in the administration haven't fought this war quite right," but still support U.S. forces and others in harm's way." Rice said. "I keep hearing and reading the American people don't want to fight this war anymore. I don't think that's right. The American people want to know that we can succeed,"

Problematic Maliki

Rice met with Iraqi Prime Minister Nouri al-Maliki and U.S. officials in the protected Green Zone that houses the U.S. embassy.

Of Maliki, Rice said she has been ``quite impressed with his performance.''

Although Rice used her visit to publicly praise the Iraqi government's role in a new security crackdown in Baghdad, an Iraqi official said she was more critical in private.

Nouri al-Malikibecame prime minister in May 2006, and his time in office has been defined by a surge in sectarian violence and lack of progress in improving services, curbing soaring unemployment and fighting crime.

In July of 2006 al-Maliki was quoted as declining to condemn Hezbollah and blamed the violence in Israel and Lebanon, triggered by Hezbollah’s kidnapping of two Israeli soldiers, on “Israeli aggression.” Making matters worse, Iraqi parliament Speaker Mahmoud al-Mashhadani accused Jews of masterminding killings in Iraq that were carried out by Sunni or Shiite insurgents

Last November, a Bush national security adviser had expressed doubts about the Iraqi prime minister's ability to end sectarian tensions ahead of a meeting between Bush and Maliki in Amman, Jordan. A confidential White House memo leaked in November questioned his ability to deal with the violence, and the Iraq Study Group report, prepared by a bipartisan commission, recommended that Washington should reduce military and political support to his government if it fails to make progress in curbing the violence.

In January of this year Iraqi Prime Minister Nouri al-Maliki said in a published report that he wishes he could leave office before his four-year term is up and would not run again."I didn't want to take this position," al-Maliki told the Wall Street Journal in an interview. "I only agreed because I thought it would serve the national interest, and I will not accept it again."

And though Rice spoke approvingly of Prime Minister Nouri al-Maliki's leadership, she urged Iraqi officials to enact laws to fairly administer the country's vast oil reserves.

Rice's message to the Iraqi's:

"The American people want to see results and aren't prepared to wait forever," Rice said during a 30-minute conversation with reporters in U.S. Ambassador Zalmay Khalilzad's living room. "But we're also not saying to the Iraqis: 'Get it done by X date or else.' That's not the way one treats a partnership in these difficult circumstances."

Rice met with al-Maliki and President Jalal Talabani and later had lunch at the U.S. ambassador's residence with a group that included the Kurdish deputy prime minister and the country's foreign minister.

"The Baghdad security plan is just beginning to unfold, and I think it's important to realize it wasn't ever intended to be a sort of single day -- it was intended to ramp up over time.''

Rice told Iraqi government leaders Saturday that the contentious debate in Washington over President Bush's war strategy reflects U.S. doubts that democracy will prevail over violence.

"Some of the debate in Washington is in fact indicative of the concerns that some of the American people have ... if the Iraqi government doesn't do what it has said it will do," Rice said she told leaders from all of Iraq's factions.


Meeting with US troops:

In a talk with U.S. personnel in Baghdad, Rice described their mission as essential ``for the security and well-being of the United States.''

Rice acknowledged the debate about the war in the U.S. and told the soldiers and civilians that their sacrifice is ``appreciated.''

This comes in contrast to Presidential hopeful Senator Barak Obama, who got his candidacy off to an inauspicious start by saying last weekend that the war “should have never been authorized, and should have never been waged, and on which we've now spent $400 billion, and have seen over 3,000 lives of the bravest young Americans wasted.''


Whats happening now:


Iraqi and U.S. forces expanded searches in Baghdad and cleared neighborhoods of suspected militants this past week in an operation to beef up security in Iraq as violence between Shiite and Sunni Muslims continued.

Rice said the joint operations were ``off to a good start, " and that she was `Impressed'.

But then Rice told Iraqi leaders that the Baghdad security operation needs to "rise above sectarianism" and noted that no U.S. or Iraqi forces have yet moved into the capital's major Shiite militia stronghold, the Iraqi official said.

The official said Rice told Prime Minister Nouri al-Maliki that the initial stage of the crackdown, which began Wednesday, appeared to focus on Sunni areas and had left Sadr City, stronghold of the Mahdi Army militia, nearly untouched.

Explosions last week in Baghdad killed at least 59 people on the first anniversary of the blast at the Shiite Muslim al-Askari mosque in Samarra, an event that triggered a wave of bloodshed between Shiites and Sunnis. The United Nations has said the sectarian violence last year left 34,452 civilians dead.


Then on Sunday following Rice's visit there were twin explosions in an open-air market that claimed 62 lives and a third blast that killed one. The first blast tore through a produce market in the mostly Shiite area of New Baghdad, toppling the wooden stalls and leaving pools of blood and vegetables trampled in the chaos. Minutes later, another car bomb exploded near a row of stores.


More than 129 people were injured, including many women who were shopping, said police and rescue officials who spoke on condition of anonymity because they are not authorized to speak to the media.

Victims were carried to hospitals on makeshift stretchers or in the arms of rescuers.

Another car bomb in the Shiite enclave of Sadr City left at least one dead and 10 wounded, police said.

It was by far the deadliest day since the security sweeps began. On Thursday, a string of car bombs killed seven civilians on the first full day of the house-to-house searches for weapons and suspected militants.

The U.S.-led teams have faced limited direct defiance as they set up checkpoints and comb neighborhoods. But that could change as they move into more volatile sections of the city. The next could be Sadr City, a stronghold of the Mahdi Army militia loyal to radical Shiite cleric Muqtada al-Sadr.

U.S. soldiers pressed closer to Sadr City on Sunday and the reception changed noticeably. In previous days, Shiite families opened their doors to welcome the troops _ feeling that the American presence would be a buffer against feared attacks from Sunni militia.

On Sunday, in areas closer to Sadr City, parents slapped away the candy and lollipops given to children by soldiers.

Iran & Syria borders

The borders with Iran and Syria _ shut for three days as the plan got under way _ reopened Sunday. But new and strict rules will apply.

Moussawi, the plan's spokesman, was quoted in the Azzaman newspaper as saying the crossing points to the two nations would be open for only several hours a day and under "intense observation."
In Tehran, Syrian President Bashar Assad held talks with Iranian leaders, including President Mahmoud Ahamedinejad. The two leaders are generally on opposing sides of Iraq's sectarian divide: Iran backs the majority Shiites, and Syria is seen as a key supporter of Sunnis.Iran denies any role in the US claim that Iraqi militants receive aid and supplies from Iran, including parts for lethal roadside bombs targeting U.S. forces.Iran also denies that the anti-American cleric al-Sadr has crossed over from Iraq into Iran.

Next on Rice's agenda

Rice is due to meet with Israeli Foreign Minister Tzipi Livni Sunday and with Palestinian and Israeli officials Monday ahead of a three-way summit with Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas on Feb. 19. That summit is designed to jumpstart negotiations toward the creation of a Palestinian state alongside Israel.

That mission was complicated by last week's announced power-sharing pact between the U.S-backed Palestinian President and Hamas militants whom the Bush administration considers terrorists.
-posted by Paul Grant (follower of Basho)