Home | Business News | Browse by Publication | F | Foreign Policy in Focus

Slick connections: U.S. influence on Iraqi oil.

Article Excerpt
"The oil belongs to the Iraqi people. It's their asset," declared President George W. Bush in a press conference on the White House lawn in June 2006. He had just returned from a surprise visit to Baghdad, in which oil had been one of the main subjects of discussion.

"We talked about how to advise the government to best use that money for the benefit of the people," he clarified.

But by January 2007, the euphemism of "advice" had been dropped, as passage of an oil law became a "benchmark," an instruction to the Iraqi government.

Violating the very notions of freedom and democracy Bush invokes in nearly every speech on Iraq, the U.S. government has actively intervened in the restructuring of Iraq's oil industry since at least 2002. At different times, the Iraqi government has been threatened that passing the oil law was a precondition for partial reduction of Saddam Hussein's debts, for the provision of reconstruction funds, and even for the continued survival (through U.S. military support) of the al-Maliki government itself.

The issues could hardly be more important for Iraq. Oil accounts for more than 90% of government revenue, and is the main driver of Iraq's economy. And decisions made in the coming months will not be reversible--once contracts are signed, they will have a major bearing on Iraq's economy and politics for decades to come.

No wonder polls have shown that roughly 75% of Iraqis think one of the main reasons why the United States invaded Iraq was "to control Iraqi oil." (1)

Attempting to reverse this perception and change U.S. policy, lawmakers passed legislation stating that the United States should not exert "control over any oil resource of Iraq." But contradicting this sentiment, the Congress also passed a law that required reporting on a set of U.S. imposed benchmarks, which included language for the Iraqi parliament to pass "legislation to ensure the equitable distribution of hydrocarbon resources." The administration has used this benchmark to push a law that has almost nothing to do with revenue distribution among Iraq's sectarian groups, and everything to do with creating highly profitable opportunities for multinational oil corporations. (2)

Under pressure from the U.S. government, the Iraqi cabinet has endorsed the controversial oil law, which now awaits approval in the Parliament. Yet among Iraqis, the law faces extensive opposition, including from two of the law's three original authors--as well as more than 100 of Iraq's most senior oil experts, the powerful oil unions, and other religious and secular civil society organizations.

Ironically, the law deemed to be needed to bring the country together, instead has the potential to violently rip it apart.

Oil Pressure: A History of U.S: Involvement in Iraq s Oil Development

Feb.-March 2001: White House Energy Taskforce produces a list of "Foreign Suitors for Iraqi Oilfield Contracts." (3)

December 2002-April 2003: U.S. State Department Oil and Energy Working...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!