Oil law hits more bumps in the road

Opposition to the proposed Iraq oil law is growing.

Any illusions Washington may have entertained to rush this law through Iraq’s approval process have hit a wall. Iraqi lawmakers have not allowed themselves to be intimidated or pressured into making rash decisions and are asking pertinent question.

Opposition ranges from vehement to measured, but two things are clear: The May deadline that the White House had been banking on is in doubt. And even if the law is passed, it fails to resolve key issues, including how to divide Iraq’s oil revenue among its Shiite, Kurdish and Sunni regions, and how much foreign investment to allow. Those questions would be put off for future debates.

Opposition has not only come from the expected camps, but also from allied ones.

The Kurdish regional government voiced its opposition to the measure last month after seeing lists drawn up by the Iraqi central government that categorized the oil fields according to levels of development and geographical boundaries. Those factors would determine who would manage the fields and the contracts involving them — regional authorities or the state-run Iraq National Oil Co., which has yet to be established.

Apart from the sharing of the profits, the other big issue is how much should be given away to foreign companies?

Next to how to divide the money, the most contentious issue appears to be the role of foreign investment. The measure envisions profit-sharing agreements, which reward foreign contractors for doing business in risky environments.

At the end of the day, the fundamental issue remains. The oil belongs to Iraq and it should be Iraq that has the final decision when it comes to any such agreement.

Imad Abdul Hussain, a leader of the Federation of Oil Unions, said workers want oil production to remain in government hands.

“Oil is Iraq’s sovereignty. It is the only wealth in Iraq. It unifies Iraqis. When we give it to a foreign investor, this means the sovereignty is taken away,” he said.

The bottom line is that before the 2003 invasion, OPEC restrictions aside, Iraq had 100% control of oil production and revenues. The possibility of a Saddam unencumbered by sanctions and no longer pliant to US interests was the real threat, not WMD or Al Qaeda. Any country that controls one of the world’s largest oil reserves wields enormous powerful and the possibility of such a country acting contrary to the interests of the US cannot be tolerated.

Text and images ©2024 Antony Loewenstein. All rights reserved.

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