US tightens grip on Iraq oil
WORKERS, JAN 2006 ISSUE
Over a hundred thousand dead, mostly women and children and for what? So that UK and US oil companies can plunder the once nationalised oil reserves of Iraq, the sixth largest in the world. Multinational companies, often directly linked to the Republican Party, profited from the military expenditure against Iraq, then profited from the contracts to rebuild the infrastructure. Now their real prize is in sight: the oil they have coveted since the turn of the last century. As Sir Maurice Hankey, Britain's First Secretary of the War Cabinet in 1918, said: "Control over these oil supplies becomes a first class British war aim."
The US and UK occupiers are now negotiating long term, largely secret, Production Sharing Agreements (PSAs) with the Iraqi puppet government. These tie Iraq to between 25 and 40 year deals whereby at least 64% of Iraq's oil reserves will be developed by private multinational oil companies (mostly British and American).
At an oil price of $40 per barrel, Iraq stands to lose between $74 billion and $194 billion over the lifetime of the proposed contracts from only the first 12 of more than 60 to be developed. Under the likely terms of the contracts, oil company rates of return from investing in Iraq would range from 42% to 162%, which is far in excess of the usual industry minimum target of around 12% return on investment. While technically the legal ownership of the oil reserves is retained in Iraqi state hands, in reality the Iraqi oil will profit American and British capitalists. The PSAs will be immune from any public scrutiny and would lock any new Iraqi government into economic terms that cannot be altered for decades. None of the top oil producers in the Middle East use PSAs.
The General Union of Oil Employees in Basrah is opposing the PSAs and requires messages of solidarity on naftana@riseup.net. Further details of what is happening to Iraq's oil can be found in "Crude Designs, the Rip Off of Iraq's Oil Wealth", published by War on Want and others on mailroom@waronwant.org.