The Hydrocarbon Law in Iraq
While the US military is taking unsustainable levels of loss in Iraq and the civilian population has been laid low by the death squads sponsored by the Iraqi Government, the sectarian militias and criminal gangs of every hue and color, the Administration of HGeorge W Bush quietly and away from the glare of international publicity won a major victory:for the first time since 1972 foreign oil companies will be permitted to have 80% stake in the oil wealth of Iraq. The new law will ofcourse be approved by the "sovereign" "independent" Government of Iraq and when implemented will be the reward for the drutal and unlawful invasion of Iraq.
Iraq has 115 billion barrels of oil reserves and 110 trillion cubic fet of natural gas, making it one of the wealthiest oil endowded countries in the world. The huge loss of civilian lives can now be seen in the right context. The new law allows foreign companies access to 64% of the known reserves. When production expands to a further 200 million barrels, then such companies would have control over 87% of the total oil production of Iraq. Now it is clear whuy the USA and its allies made such a huge noise about Saddam Hussein and his so called weapons of mass destruction. Saddam knowing the intentions of the USA and her allies had tried to resist but the quislings got the better of him, hanged him and are now in the process of handing Iraq's national wealth to the very enemies of Iraq. The Iraq National Oil Company (INOC) will from now on only be a coordinator and facilitator for the exploitation of Iraqi oil by foreign companies. The Iraqi people are unlikely to protest in the near future beacuse there is so much violence all around that surviaval has become the biggest challenge for them.
The new law institutionalises the participation of foreign oil companies in the exploitation of Iraq's oil. There is provision in the law for a Federal oil and Gas Council which will have representatives from "related companies". This new body will aso sit in judement on the contracts signed with previous partners such as Russia and China. Though Iraq contiues to be a member of the OPEC, this new law will make its membership in the OPEC cartel redundant. For the first time since the 1973 Arab Israeli War, Arab oil will flow directly to Israel from the Jaffa pipeline and this means that the Iraq war had the strategic interests of Israel in view.
The new law is bound to create major problems for the cause of Iraqi territorial unity since the so called regional governments can make their own private deals with foreign companies for the sale of oil reserves located in their territories. It is well known that Sunni areas have very little oil and therefore this law will seriously jeopardise the unity and territorial integrity of Iraq.
However there is every chance that with the impending withdrawal of the US forces this agreement will stand rejected as no self respecting Government can abide by its terms.