HT Image
HT Image

A slippery business

A draft Iraqi oil law fulfils the economic goal of the war and occupation, writes AG Noorani.
By AG Noorani | None
UPDATED ON APR 23, 2007 11:32 PM IST

More than three-quarters of the world’s oil is owned and controlled by the State. Iran, Saudi Arabia and Kuwait have nationalised oil systems and bar foreign control over oil development. Foreign companies are hired only to provide specific services, for limited terms. They are given no direct interest in the oil produced. Iraq’s oil resources are estimated to be the second largest in the world. The draft Iraqi oil law would all but privatise Iraq’s oil industry under the cloak of “production-sharing agreements”.

Iraq’s five trade union federations, representing hundreds of thousands of workers, oppose the law. It would entail “the handing of control over oil to foreign companies, which would undermine the sovereignty of the State and the dignity of the people”. On February 8, they wrote to President Jalal Talbani asking him not to assent to the law. “Production-sharing agreements are a relic of the 1960s. They will imprison Iraq’s economy and infringe on Iraq’s sovereignty... We warn against falling into this trap.”

The law was approved by the Iraqi cabinet on February 26 and is up for enactment by the Council of Representatives. Everything is fixed. The outgoing US ambassador, Zalmay Khalilzad, said, “Companion legislation will be required in several areas, and Iraqi leaders hope to complete the entire hydrocarbon legislation by the end of May.”

It would be a pity if India’s trade unions withhold their support to Iraq’s trade unions in the grim battles that lie ahead. The draft law has been exposed by two erudite and courageous activists — Ewa Jasiewicz, a researcher at Platform, a British human rights and environment group that monitors the oil industry, and Antonia Juhasz, the Tarbell Fellow at Oil Change International and Visiting Scholar at the Institute for Policy Studies.

The draft was prepared deviously. The trade unions were kept out. Jasiewicz noted, “It has not been put together in any kind of democratic process... It’s been put through a war and an occupation which in itself is a grotesquely undemocratic process. It was prepared by a three-member Iraqi cabinet committee, dominated by the Kurds and the Shiites. The first draft was seen only by the committee of the Iraqi technocrat who penned it, nine international oil companies, the British and the US governments and the IMF.”

There are 1,40,000 US troops on Iraqi soil. Jesiewicz added, “The law can be regarded as the economic goal of the war and occupation and that it will be viewed by most Iraqis as not just illegitimate, but a war crime.” The name of the game is ‘the production-sharing agreement’. It is “a form of privatisation and that’s why those countries (Saudi Arabia, Iran and Kuwait) haven’t signed these, because it’s not in their interests.”

Iraq’s oil professionals advocate technical service/contracts under which a company renders services for a fee and then quits. They cover building a refinery, laying a pipeline, or offering consultancy services. Exploration, production and development of oil remain exclusively under State control. The companies have no legal interest in the oil. The profits belong to the State. In ‘production-sharing’, they go to the multinationals.

Juhasz writes: “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 to 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.”

Production-sharing agreements are the oil industry’s preferred model, but are rejected by all the top oil-producing countries in West Asia 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 per cent of the world’s oil.”

The US invasion fragmented the Iraqi State. The draft law confers on the regions power to negotiate contracts with the multinationals. True, oil revenues would be distributed to all the 18 provinces, depending on the size of the population. The law also professes to preserve Iraq’s unity, but only to splinter it. It confirms the ownership of oil and gas as national property, only to facilitate its barter to multinationals.

A perusal of the 43-Article Draft Law makes one understand the outrage it has unleashed. Double-talks begins with the preamble and animates the text. A recital of national ownership is followed by this admission! “The oil activities operated solely by the Ministry of Oil have to be transferred to technical and commercial entities and institutions, including an independent national Iraqi oil company, and the Iraqi provinces and regions should be given more authorities... the rehabilitation and further development of the petroleum industry will be enhanced by the participation of international and national investors of recognised technical, managerial and operational skills as well as robust capital resources to help upgrade and develop national expertise and efficiency in the petroleum sector.”

The very purpose of the law is “the introduction of a variety of national and international players in the development of the petroleum sector”. Article 1 grandiloquently proclaims national ownership of oil and gas. But the key provision is Article 9 on the ‘Grant of Rights’. It reads, “The rights for conducting Petroleum Operations shall be granted on the basis of an Exploration and Production contract. The contract shall be entered between the Ministry (or the regional entity) and an Iraqi or Foreign Person, natural or legal, which has demonstrated to the Ministry the technical competence and financial capability that are adequate for the efficient conduct of Petroleum Operations...” Article 4(19) defines ‘petroleum operations’ to mean “all or any of the activities related to exploration, development, production, separation and treatment, storage, transportation and sale or delivery of petroleum at the delivery point, export point or to the agreed supply point inside or outside Iraq. And includes Natural Gas treatment operations and the closure of all concluded activities.”

Iraq would not have made so radical a break from the past were it not for the US occupation. Disputes will not be resolved in Iraqi courts but in arbitration proceedings in Paris or at the Chamber of Commerce in Geneva. Antonia Juhasz recalls that “in March 2001, the National Energy Policy Development Group (better known as US Vice-President Dick Cheney’s energy task force), which included executives of America’s largest energy companies, recommended that the US government support initiatives by West Asian countries “to open up areas of their energy sectors to foreign investment”.

This is exactly what the proposed Iraq oil law would achieve. It has happened before. Iran’s popular Prime Minister Mohammad Moasddeq was toppled by the US and Britain in 1953 after he nationalised the oil industry. With the oil law, the rape of Iraq will be complete.

SHARE THIS ARTICLE ON
Close
Civil society members and corporators from Srinagar during a candle light protest outside Krishna Dhaba, whose owner's son Aakash Mehra succumbed to injuries, 11 days after he was shot.(ANI)
Civil society members and corporators from Srinagar during a candle light protest outside Krishna Dhaba, whose owner's son Aakash Mehra succumbed to injuries, 11 days after he was shot.(ANI)

Srinagar market desolate after death of eatery owner's son in militant attack

By Ashiq Hussain
PUBLISHED ON MAR 02, 2021 11:13 PM IST
  • For the past 13 days, the Durga-Nag market at Dalgate in Srinagar has been desolate and locals and traders in grief
Close
The Election Commission of India.(HT File Photo)
The Election Commission of India.(HT File Photo)

PM Modi’s photo on vaccination certificate violates model code, TMC tells ECI

PUBLISHED ON MAR 02, 2021 10:36 PM IST
  • TMC’s leader in the Rajya Sabha Derek O, Brien asked the Election Commission to stop the Prime Minister "from taking unfair advantages and undue publicity at tax payer’s cost during the conduct of elections".
Close
Congress members burn an effigy of senior party leader Ghulam Nabi Azad during a protest, in Jammu on Tuesday.(PTI)
Congress members burn an effigy of senior party leader Ghulam Nabi Azad during a protest, in Jammu on Tuesday.(PTI)

Ghulam Nabi Azad becomes catalyst in rift in Congress unit in J-K

PUBLISHED ON MAR 02, 2021 09:52 PM IST
  • Ghulam Nabi Azad detractors and supporters in the Jammu and Kashmir Pradesh Committee accused each other of acting at the behest of the BJP.
Close
Akhil Gogoi was arrested at Jorhat on December 12, 2019 for his role in the protests against Citizenship Amendment Act.(Photo @kmss_assam)
Akhil Gogoi was arrested at Jorhat on December 12, 2019 for his role in the protests against Citizenship Amendment Act.(Photo @kmss_assam)

Jailed Assam leader urges parties to put up common candidates against BJP

PUBLISHED ON MAR 02, 2021 09:50 PM IST
  • Jailed Assam leader urges parties to put up common candidates against BJP
Close
I&B minister Prakash Javadekar (ANI File Photo)
I&B minister Prakash Javadekar (ANI File Photo)

Notice to Manipuri talk show under new digital media laws revoked

By hindustantimes.com, New Delhi
UPDATED ON MAR 02, 2021 10:26 PM IST
Reacting to the controversy, I&B minister Prakash Javadekar told Hindustan Times, "The mechanism is mostly self-regulatory and only in very serious cases can they complain to the ministry." Javadekar further said the rules were “very clear that a DM does not have the power to issue such a notice”.
Close
A senior BJP leader said the party wanted to clinch the seat-sharing deal before home minister Amit Shah's expected visit on March 7. In picture - Amit Shah and TN CM Edappadi K Palaniswami.(ANI)
A senior BJP leader said the party wanted to clinch the seat-sharing deal before home minister Amit Shah's expected visit on March 7. In picture - Amit Shah and TN CM Edappadi K Palaniswami.(ANI)

AIADMK, DMK continue seat-sharing talks with allies for TN assembly polls

PTI, Chennai
UPDATED ON MAR 02, 2021 09:31 PM IST
While a senior BJP leader said the party wanted to finalise the pact before Union Home Minister Amith Shah's expected visit later this week, the state Congress said the talks with DMK were cordial.
Close
The petition filed in the Supreme Court of India questioned the February 26 decision of the poll panel declaring eight-phase polling in West Bengal.(HT Photo)
The petition filed in the Supreme Court of India questioned the February 26 decision of the poll panel declaring eight-phase polling in West Bengal.(HT Photo)

News updates from HT: Plea filed in SC on eight-phase elections in West Bengal

By hindustantimes.com, New Delhi
PUBLISHED ON MAR 02, 2021 08:49 PM IST
Here are today’s top news, analysis and opinion. Know all about the latest news and other news updates from Hindustan Times.
Close
Prime Minister Narendra Modi addresses the inauguration of Maritime India Summit 2021, through video conferencing in New Delhi on Tuesday. (PTI PHOTO).
Prime Minister Narendra Modi addresses the inauguration of Maritime India Summit 2021, through video conferencing in New Delhi on Tuesday. (PTI PHOTO).

India to invest $82 billion in port projects by 2035: PM Modi

By HT Correspondent, Hindustan Times, New Delhi
UPDATED ON MAR 02, 2021 09:12 PM IST
  • The capacity of major ports which was around 870 million tonnes per annum in 2014 has increased to around 1550 million tonnes per annum now, the Prime Minister said.
Close
Search and rescue operations for the missing underway in Chamoli. (ANI)(HT_PRINT)
Search and rescue operations for the missing underway in Chamoli. (ANI)(HT_PRINT)

Jharkhand govt begins compensation process for victims of Chamoli glacier burst

ANI, Ranchi
PUBLISHED ON MAR 02, 2021 08:44 PM IST
The families of the deceased will be given a sum of 1 lakh under the Jharkhand Interstate Migrant Labourers Survey and Rehabilitation scheme.
Close
The Assembly elections in Tamil Nadu, Puducherry and Kerala will be held in a single phase on April 6 and the counting of votes will be taken up on May 2.(HT Photo)
The Assembly elections in Tamil Nadu, Puducherry and Kerala will be held in a single phase on April 6 and the counting of votes will be taken up on May 2.(HT Photo)

Congress forms screening panels for TN, WB, Kerala, Puducherry assembly polls

PTI, New Delhi
PUBLISHED ON MAR 02, 2021 08:37 PM IST
The screening committee of the Congress for the eight-phased West Bengal Assembly polls starting March 27 will have Delhi leader J P Aggarwal as its chairman.
Close
Congress leader Rahul Gandhi meets PSC rank-holders who are protesting outside the Secretariat complex against "backdoor" recruitment by the Kerala government in Thiruvananthapuram on Tuesday. (ANI)
Congress leader Rahul Gandhi meets PSC rank-holders who are protesting outside the Secretariat complex against "backdoor" recruitment by the Kerala government in Thiruvananthapuram on Tuesday. (ANI)

Rebel woes pose a threat to Congress in poll-bound Kerala

PUBLISHED ON MAR 02, 2021 08:32 PM IST
  • Party leaders fear that dissension may heighten in the coming days-- posters and notices have started appearing at many places against probable candidates.
Close
The petition questioned the February 26 decision of the poll panel declaring eight-phase polling in West Bengal as against three phases in Assam, and a single phase in the states of Tamil Nadu, Kerala and Union Territory of Puducherry.
The petition questioned the February 26 decision of the poll panel declaring eight-phase polling in West Bengal as against three phases in Assam, and a single phase in the states of Tamil Nadu, Kerala and Union Territory of Puducherry.

On West Bengal elections in 8 phases, a plea in Supreme Court

By Abraham Thomas, Hindustan Times, Delhi
PUBLISHED ON MAR 02, 2021 08:01 PM IST
Elections will begin in West Bengal on March 27 and the results will be announced on May 2.
Close
Without naming anyone, Bikram Majithia asked the Speaker to take action against MLAs who left their parent parties to join others.(Twitter)
Without naming anyone, Bikram Majithia asked the Speaker to take action against MLAs who left their parent parties to join others.(Twitter)

SAD, AAP seek action under anti-defection law against MLAs who switched sides

PTI, Chandigarh
PUBLISHED ON MAR 02, 2021 07:53 PM IST
The issue was raised by Shiromani Akali Dal MLA Bikram Singh Majithia during the zero hour on the second day of the Budget session of the state Assembly here.
Close
Opposition MLAs at a sit-in at the legislative assembly in Gairsain on Tuesday over Monday's lathi charge against villagers.(Kalyan Das/HT PHOTO)
Opposition MLAs at a sit-in at the legislative assembly in Gairsain on Tuesday over Monday's lathi charge against villagers.(Kalyan Das/HT PHOTO)

Police crackdown on villagers sparks pandemonium in Uttarakhand assembly

PUBLISHED ON MAR 02, 2021 07:48 PM IST
  • The opposition Congress accused the government of "high handedness" against the protestors especially women while drawing parallels with British rule and calling it "General Dyer's government".
Close
Balbir Rajewal added that the union will not support any political party in the upcoming assembly elections.
Balbir Rajewal added that the union will not support any political party in the upcoming assembly elections.

'Will send team to poll-bound states', says farmer leader

By hindustantimes.com | Edited by Ayshee Bhaduri, Hindustan Times, New Delhi
UPDATED ON MAR 02, 2021 07:49 PM IST
  • “We'll send teams to poll-bound states - to West Bengal and Kerala. We will not support any party but appeal to people to vote for the candidates who can defeat BJP.", said BKU leader Balbir S Rajewal
Close
SHARE
Story Saved
OPEN APP