Oil Law Redux

hotpotatomash has forwarded the leaked Iraq Oil Law. Raed Jarrar of Raed in the Middle got a leaked copy of the new law. Democracy Now has a transcript of Antonia Juhasz and Raed discussing the law. I've read much of the document that Raed has translated and the wording is, as one might expect, rather vague, no doubt intentionally so. The law keeps in place the controversial Production Sharing Agreements (PSAs), which appear now to be called Exploration and Production contracts and are expected to lead to bountiful profit margins for Big Oil, which will hold seats on the envisioned Federal Oil and Gas Council (FOGC). The FOGC "approves all types of exploration and production contracts and chooses the appropriate contract type for the field nature or exploration area or based on offers." In other words, the "executive managers of from [sic] important related petroleum companies" will have direct input on the types of contracts awarded to those same "important related petroleum companies."

Furthermore,

the law certainly opens the door to US oil companies and the Bush administration winning a very large piece of their objective of going to war in Iraq, at least winning it on paper. The law does almost word for word what was laid out in the Baker-Hamilton recommendation, which I discussed previously on your show, which is, at the very basic level, to turn Iraq's nationalized oil system, the model that 90% of the world’s oil is governed by, take its nationalized oil system and turn it into a commercial system fully open to foreign corporate investment on terms as of yet to be decided. So it leaves vague this very important question of what type of contracts will the Iraqi government use. But what it leaves clear is that basically every level of the oil industry will be open to private foreign companies.

The type and form of the "model" contract is specifically left to a later date to be "appended to this law" after approval by the FOGC.

In all, nothing much has changed from the original draft oil law that was first produced by Bearing Point Inc. and distributed to oil companies and the IMF while, to this day, most Iraqi parliamentarians have yet to see the legislation. And the preamble in the new national Oil Law notes,

WHEREAS, Iraq Produciton capacity during the last decades has been low and at great diparity with its exceptionally rich Oil and Gas resources.

I'll refer again to the cover story in The Humanist magazine this month: The Long Game.