The Truth about Iraq and Oil

[Straw Man]

One of the benchmarks that the White House has graded as "unsatisfactory" is the Iraqi Hydrocarbon Law that the White House presents as being about "equal distribution of oil revenue to ALL IRAQI'S

from the White House:  http://www.whitehouse.gov/news/releases/2007/07/20070712.html

Assessment: The current status is unsatisfactory, but it is too early to tell whether the Government of Iraq will enact and implement legislation to ensure the equitable distribution of hydrocarbon resources to all Iraqis

The REALITY is that the law is all about ensuring that foreign oil companies have majority control over Iraqi Oil.

Frankly - I have mixed feelings about this.  We all knew the war was mostly about OIL but why does the US taxpayer have to fund the development of new resources that will be used to benefit the 4 major oil companies? 

I know most Neo-Cons are not really "detail" people but this check out this summary and see if you think you'd want to pass this law if you were a politician in Iraq

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Analysis of  Iraqi "Hydrocarbon Law" Section by Section:

The Feb 15th, 2007 draft was made available, not because the Iraqi government released it, but because the Kurds released it.

This version passed the Iraq Cabinet, and was referred to the Parliament. 

The legislation contains only three sentences in regards to the fair distribution of oil, but do not resolve any of the issues facing this challenge. The legislation simply requires that future legislation be submitted for approval. Thus, this legislation does not even meet the President's benchmark.

Under the new law, the Iraq National Oil Company would have exclusive control of only about 17 of Iraq's approximately 80 known oil fields.

Under the proposed law, foreign companies would not have to invest their earnings in Iraq, hire Iraqi workers, or partner with Iraqi companies.

The legislation ensures that the "Chief Executives of important related petroleum companies" are represented on the Federal Oil and Gas Council, which approves oil and gas contracts. This is akin to the foreign oil companies approving their own contracts. 

The legislation ensures the Iraq National Oil Company has no exclusive rights for exploration, development, production, transportation, and marketing. The Iraq National Oil Company must compete against foreign oil companies with rules that benefit the foreign oil companies.

The legislation gives the Iraq National Oil Company some control of developed oil fields and "rights to participate" in undeveloped oil fields in Annex I and II, but these Annexes have never been made public.

The legislation gives the Iraq National Oil Company temporary control of the oil pipelines and export terminals, but then directs the Federal Oil and Gas Council to turn these assets over to any entity with no further instructions. The opportunity for a foreign oil company to have control over the Iraqi oil pipeline and export terminals would give that company enormous control of the Iraqi oil market.


The legislation demands that "contracts must guarantee the best levels of coordination" with the Oil Ministry, Iraq National Oil Company, the regions and oil companies.

The legislation mandates that undeveloped oil fields be developed quickly and oil companies are given explicit authority to "collaborate." The legislation does not require contracts to be published for public review up to two months after the approval.

The legislation provides up to 35 years of exclusive control over oil fields for foreign oil companies.

The legislation provides for a preference to Iraqis for jobs and services, but only if these benefits do not place extra costs or inconveniences on the foreign oil companies.

The legislation states that disputes between the State of Iraq and any foreign investors will be submitted for arbitration to an international court and will not be decided upon by an Iraqi court.   

The legislation has four appendices, whose contents remain secret:

ANNEX NO. 1: PRESENT PRODUCING FIELDS ALLOCATED TO THE IRAQ NATIONAL OIL COMPANY

ANNEX NO. 2: DISCOVERED (UNDEVELOPED) FIELDS ALLOCATED TO THE IRAQ NATIONAL OIL COMPANY

ANNEX NO. 3: DISCOVERED (UNDEVELOPED) FIELDS OUTSIDE THE OPERATIONS OF THE IRAQ NATIONAL OIL COMPANY

ANNEX NO. 4: EXPLORATION AREAS
The appendices will effectively make clear which oil fields will be controlled by the Iraqi National Oil Company and which are open to foreign control of oil companies.

http://www.uslaboragainstwar.org/article.php?id=13689

[headhuntersix]

All things being eqaul..if this leads to higher production and lower prices..i'll pay. if it leads to the same crap we're seeing then...no. As it stands, its on our end that we're getting higher prices. Maybe with access to more oil revenues, maybe they'll build more refineries and we can get cheaper gas. I'm not sure these guys need more money.

[Straw Man]

All things being eqaul..if this leads to higher production and lower prices..i'll pay. if it leads to the same crap we're seeing then...no. As it stands, its on our end that we're getting higher prices. Maybe with access to more oil revenues, maybe they'll build more refineries and we can get cheaper gas. I'm not sure these guys need more money.

I doubtful that this will ever lead to lower gas prices

This is a finite resource and as the resource becomes more scarce (and concurrently as worldwide demand grows)
the price will only go higher

All we (the US taxpayer) have done is spend 500 billion to help secure sweetheart deals for major oil companies to have access to more product which they will sell on at wherever they can get the best price.

Paul Wolfowitz famously asserted that the Iraqi oil revenue would pay for the war and reconstruction.

I'd like to see some provision in the law for our 500 billion dollar investment to be repaid with interest/profit sharing to the US tax payer

[headhuntersix]

I agree with all or most of that. If Paul Wolfowitz told me the sky was blue, I wouldn't check, i'd kick him in the nuts. He's the guy who should be held resposible for Iraq, yeah yeah the buck stops with Bush, but he and that other idiot Rumsfeld are responsible. We could have been alot farther along with those two.

[Straw Man]

I agree with all or most of that. If Paul Wolfowitz told me the sky was blue, I wouldn't check, i'd kick him in the nuts. He's the guy who should be held resposible for Iraq, yeah yeah the buck stops with Bush, but he and that other idiot Rumsfeld are responsible. We could have been alot farther along with those two.

agreed

[headhuntersix]

Schocking isn't it.

[Eyeball Chambers]

agreed

Schocking isn't it.

Good to see!