The Iraqi parliament is on verge of passing new legislation to restructure the country’s oil industry – effectively handing it over to foreign multinational control, according to a draft copy of the law leaked last weekend.
Iraq’s oil industry was nationalised in the early 1970s. But the new law dismantles most of the functions of the Ministry of Oil and transfers them to a variety of “technical and commercial entities and institutions”.
Private oil companies will bid for “exploration and production contracts” that grant them exclusive rights to search for and pump out oil in a specified area.
While the oil legally remains “the property of the nation”, in practice the private firms will make the money.
The scheme gives a green light to foreign companies to plunder Iraq’s oil wealth. No other country in the Middle East operates its oil industry in this manner.
The US has been pressing for such an arrangement since it invaded and occupied Iraq four years ago.
But the laws had been stalled by a combination of nationalist sentiment and in-fighting within the Iraqi elite.
Revenues from oil production will be deposited in a central bank account administered by “representatives from the federal government, regional governments, provinces and a number of independent consultants”.
This move has sparked fears that the bulk of the revenues will be diverted to the regions, further destabilising the country.
Iraq’s oil is concentrated in the northern Kurdish region and the south, rather than in the central area around Baghdad.
“Regions and provinces have the final say over oil policy, which provokes suspicions over intentions to divide Iraq,” says Iraqi oil expert Dr Fouad Qasim al-Ameer. “What would ensue would be a destructive competition for oil production. Iraq’s riches will be wasted in all this mayhem.”
For translations of the draft oil law and Dr al-Ameer’s commentary, go to www.raedinthemiddle.blogspot.com