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While debate rages in the United States about the military in Iraq, an equally important decision is being made inside of Iraq--the future of Iraq’s oil. A new Iraqi law proposes to open the country’s currently nationalized oil system to foreign corporate control. But emblematic of the flawed promotion of “democracy” by the Bush administration, this new law is news to most Iraqi politicians.
A leaked copy of the proposed hydrocarbon law appeared on the Internet last week at the same time that it was introduced to the Iraqi Council of Ministers. The law is expected to go to the Iraqi Council of Representatives within weeks. Yet the Internet version was the first look that most members of Iraq’s parliament had of the new law.
The new oil law gives foreign corporations access to almost every sector of Iraq’s oil and natural gas industry. This includes service contracts on existing fields that are already being developed and that are managed and operated by the Iraqi National Oil Company (INOC). For fields that have already been discovered, but not yet developed, the proposed law stipulates that INOC will have to be a partner on these contracts. But for as-yet-undiscovered fields, neither INOC nor private Iraqi companies receive preference in new exploration and development. Foreign companies have full access to these contracts.
The exploration and production contracts give firms exclusive control of fields for up to 35 years including contracts that guarantee profits for 25-years.
It’s not obligated to hire Iraqi workers train Iraqi workers, or transfer technology.
Thus, it is possible that foreign oil company executives could sit on the Council. It would be unprecedented for a sovereign country to have, for instance, an executive of ExxonMobil on the board of its key oil and gas decision-making body.
The law does not clarify who ultimately controls production levels. ... If foreign companies, rather than the Iraqi government, ultimately have control over production levels, then Iraq’s relationship to OPEC and other similar organizations would be deeply threatened.
The daily lives of most people in Iraq are overwhelmed with meeting basic needs. They are unaware of the details and full nature of the oil law shortly to be considered in parliament. Their parliamentarians, in turn, have not been included in the debate over the law and were unable to even read the draft until it was leaked on the Internet. Those Iraqis able to make their voices heard on the oil law want more time. They urge postponing a decision until Iraqis have their own sovereign state without a foreign occupation.