(10 am. – promoted by ek hornbeck)
The New York Times, on 10 September, published this story about the Iraq Government canceling oil field development contracts with Exxon-Mobil, Chevron, Shell, Total and BP.
While not particularly lucrative by industry standards, the contracts were valued for providing a foothold in Iraq at a time when oil companies are being shut out of energy-rich countries around the world.
“Not particularly lucrative” might well be interpreted to mean, they were not production sharing agreements in which the contractors, the oil companies, get ownership of a share of the oil. Rather than a share of the oil the agreements were technical service contracts in which the oil companies would be paid set fees for their services. This is the usual contractual format for services used in the other oil rich countries in the Persian Gulf Region.
The New York Times piece states that a group of Democratic senators led by Charles E. Schumer of New York had appealed to Secretary of State Condoleezza Rice to block the oil deals, that such deals might undermine the efforts of Kurds, Sunnis and Shiites to reach agreement on a hydrocarbon law and a revenue-sharing agreement. This criticism was conveyed to Iraq’s oil minister, Hussain al-Shahristani by the American Embassy in Baghdad in late June, and after that the deals were delayed.
“I’m glad the Iraqis heard our plea that to do this now would be bad for Iraq and bad for Iraqi-American relations,” Senator Schumer said in a telephone interview on Wednesday. “It’s a good first step. Now let’s make progress on the long-term” goal of passing a hydrocarbon law, he said.
The “hydrocarbon law”, formerly a supposed benchmark used to gauge progress in Iraq, allows for contracts which allow foreign oil companies to take a share of the oil in return for their services rendered. The Iraqis strongly oppose this and the elected parliament has avoided and delayed dealing with it.
Meanwhile, the Iraqi Oil Ministry has said it intends to proceed with new oil deals whether or not the Iraqi Parliament passes a “hydrocarbon law”. However, Iraq’s central government has moved on with other energy deals. The Oil Ministry last month signed its first major post-Hussein contract with the China National Petroleum Corporation. On Sunday, the Iraqi cabinet approved a deal with Shell to process natural gas in southern Iraq.
Senator Schumer said Wednesday that he would propose an amendment to the defense appropriation bill in Congress that would specify that should Iraq sign any petroleum contracts before passing the law, profits from those deals would go to defray United States reconstruction spending in Iraq.
From the NY Times article
We know that the Iraqi people and the Iraqi Parliament which they elected are opposed to any hydrocarbon law which would give foreign oil companies ownership of Iraqi oil. The hydrocarbon law would do just that. Senator Schumer knows this as does everyone in the Bush Administration and all of the other Washington insiders.
We also know that Mr. al-Maliki wants all (not just “combat” troops) gone from Iraq by 2011.
On 12 September Gulf News from UAE says that a secret report by a Kurdish political party, which is part of the national government, and which Gulf News has seen, says Al Maliki preferred strong political, economic and military relations with the Americans but not the presence and influence of the US military in his country.
According to the report, the US is weighing three options.
The first is to topple Al Maliki in parliament and bring vice-president and leader of the Islamic Supreme Council, Adel Abdul Mahdi, into power. Mahdi, according to the US, is more pragmatic than Al Maliki. He enjoys the support of Shiite leader Abdul Aziz Al Hakim. But this option may not hold as Al Hakim and Mahdi are both considered close to Iran as well.
The second option is to pressure Al Maliki to resign. But this is difficult as he heads an elected government.
The third option is an assassination attempt against Al Maliki with the help of terrorist groups, and to put in place a puppet administration favourable to the Americans.
This news comes on the heels of allegations by Bob Woodward of The Washington Post, who claims that the Bush Administration has been spying on the al Maliki for at least the past two years.
Sen. Hillary Rodham Clinton and Sen. Carl Levin, chairman of the Senate Armed Services Committee, have called for al-Maliki to be replaced.
The story is also published on this site with the caveat “The article should be taken with a shaker of salt, however, it is peppered with crucial facts that need to be addressed. It is based on a Kurdish secret report and as a rule the Kurds have proven to be the most reliable and tenacious intel gatherers in Iraq. So I wouldn’t ignore the conclusions…”
The origin for both of these stories is the so-called “Kurdish secret report”. The story is also carried by Zawaya, from Dubai, but refers to the article in Gulf News. Also it is in another Dubai publication, Middle East Times, which refers to the story in Gulf News.
In summing up the US has staked nearly a trillion dollars in its invasion and occupation of Iraq. For oil, for the opening of new markets for American corporations fed by the potential wealth from Iraq’s natural resources and as a testing ground for Milton Freidman style laissez-faire economic policies fancied by neoconservatives and neoliberals, and also for a base for the US military from which to launch forays into other parts of the resource rich Persian Gulf Region. They have come so close and yet the grand prize is still just out of reach. I would not expect them let it all slide away with one man standing in their way.