Whose Oil Is It, Anyway?

Posted April 3, 2007 in [Energy]

Antonia Juhasz, an analyst with Oil Change International, assesses the implications of the proposed Iraq Oil Law which has been largely drafted in Washington.

New York Times
Opinion Editorial

March 13, 2007
Op-Ed Contributor
Whose Oil Is It, Anyway?

By ANTONIA JUHASZ
San Francisco

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.

Antonia Juhasz, an analyst with Oil Change International, a watchdog
group, is the author of "The Bush Agenda: Invading the World, One
Economy at a Time."

What You Can Do

+ Go to the Oil Change International website http://www.PriceofOil.org
to find an automatic letter you can send to your Congressional
Representative and Senators demanding Hands Off Iraq's Oil!

+ Use this letter and any and all of the background material provided
on the site to write your own Op Ed, Letter to the Editor, language to
use to call-in to a radio show, and a flyer to hand out to your
friends and colleagues.

+ Specifically, you can write a letter to the New York Times in
response to my Op Ed - use the Op Ed as an entry way to have your say
about the oil law and the war for oil. Write no more than 150 words
and send to: letters@nytimes.com.

+ Participate in Protests against War AND Climate Change on the 4-Year
Anniversary of the Iraq War.

Oil Change International (www.PriceOfOil.org), Global Exchange
(www.Globalexchange.org), and more organizations and groups every day
are joining with Hundreds of communities throughout the US, and the
world to hold protest events on March 17-19, to mark the 4-year
anniversary of the Iraq war.

We urge environmentalists and climate change activists to join with
peace activists and organize protests on these dates at the
headquarters and gas stations of the oil companies leading the charge
in Iraq: Chevron, ExxonMobil, Marathon, ConocoPhillips, Shell and BP.
What better locations to send a message about war, oil and the
consequences of oil addiction?
List your protest at www.unitedforpeace.org.

MARCH 19 - In the Bay Area, I've joined with activists planning a
Rally, Protest, and Nonviolent Direct Action at Chevron's World
Headquarters on March 19 from 7:00-11:00am in San Ramon. Visit
www.myspace.com/ProtestChevron.

+ Learn about an international network of organizations organizing
protests under the heading "Hands Off Iraq's Oil!" Visit their website
www.HandsOffIraqiOil.org/.

+ Share this information with your friends, neighbors, community and colleagues.

+ Hold your own rally, protest, press conference, direct action, or
festival and spread the word!

+ With the media? Contact Celia Alario to arrange for great
interviewees at 310-214-6830 or celiaalario@earthlink.net.

Learn More - Visit
http://www.PriceofOil.org
http://www.TheBushAgenda.net
http://www.platform.org
http://www.handsoffiraqioil.org

--
''The people running the United States government are from the energy
industry,'' said Fredrick D. Palmer, of Peabody Energy, the world's
largest coal company. ''They understand it and they believe in energy
supply.'' - April 21, 2002.

Antonia Juhasz
Ida Tarbell Fellow
Oil Change International
http://www.PriceOfOil.org

and

Visiting Scholar
Institute for Policy Studies
http://www.ips-dc.org

The Bush Agenda: Invading the World, One Economy at a Time.
by, Antonia Juhasz
HarperCollins Publishers
http://www.thebushagenda.net