Oil game stuckwithout rules
The Washington strategists seem to be confident that the oil legislation pending before the Iraqi parliament would definitely be approved, clearing the way for US multinationals to sign exploration and production agreements that would net them tens of billions of dollars while the people of Iraq would get a pittance for their national wealth.
The confidence was reflected in last month's Iraqi announcement that the next annual renewal of the United Nations Security Council mandate for a multinational force in Iraq will be the last. The catch here is that the UN mandate the only legal basis for a continuation of the American occupation of Iraq and that is also closely linked, as far as the Security Council is concerned, to the management of Iraqi oil revenues through he "Development Fund for Iraq." Once the UN mandate for a multinational force in Iraq expires, the UN management of the country's oil revenues would also be abrogated although this requires a separate Iraqi move, which should also be coming soon.
Iraq has also announced that it hopes to sign a conventional bilateral security agreement with the United States to replace the existing UN mandate for a multinational security force by the end of 2008.
The oil script is being played out as written by the US strategists but it is currently stuck in the Iraqi parliament, with the government unable to have the assembly debate and approve it, given the reluctance of a majority of members for various reasons.
However, that has not set back the US machinery. The Republican camp in Washington is pinning high hopes on the draft legislation in order to please its financial backers, many of them oil giants and some of them with close ties with senior Bush administration officials. Not that the Democrats could be expected to fight the move; after they too have their own string-pullers in the oil industry.
We have heard arguments in public that the draft legislation is not different from many others in the region. However, in reality it is definitely different.
The draft bill, once approved by the Iraqi parliament, would clear the way for foreign oil companies to sign long-term exploration and production contracts. Compare that with the policy of most other regional governments which bans foreign control over oil development and provides for limited-duration agreements with international oil companies as contractors to provide specific services as needed without any say in oil production. Furthermore, the proposed legislation would place the Iraqi oil industry under the control of an appointed body that would include representatives of international oil companies as full voting members.
The key question that is evading an answer and probably causing major headaches in Washington is how to twist the arms of Iraqi MPs to take up the bill and push it through parliament. Definitely, it does not seem like an easy mission under the present geopolitics in strife-torn Iraq, but that is not stopping the US strategists from trying.
The confidence was reflected in last month's Iraqi announcement that the next annual renewal of the United Nations Security Council mandate for a multinational force in Iraq will be the last. The catch here is that the UN mandate the only legal basis for a continuation of the American occupation of Iraq and that is also closely linked, as far as the Security Council is concerned, to the management of Iraqi oil revenues through he "Development Fund for Iraq." Once the UN mandate for a multinational force in Iraq expires, the UN management of the country's oil revenues would also be abrogated although this requires a separate Iraqi move, which should also be coming soon.
Iraq has also announced that it hopes to sign a conventional bilateral security agreement with the United States to replace the existing UN mandate for a multinational security force by the end of 2008.
The oil script is being played out as written by the US strategists but it is currently stuck in the Iraqi parliament, with the government unable to have the assembly debate and approve it, given the reluctance of a majority of members for various reasons.
However, that has not set back the US machinery. The Republican camp in Washington is pinning high hopes on the draft legislation in order to please its financial backers, many of them oil giants and some of them with close ties with senior Bush administration officials. Not that the Democrats could be expected to fight the move; after they too have their own string-pullers in the oil industry.
We have heard arguments in public that the draft legislation is not different from many others in the region. However, in reality it is definitely different.
The draft bill, once approved by the Iraqi parliament, would clear the way for foreign oil companies to sign long-term exploration and production contracts. Compare that with the policy of most other regional governments which bans foreign control over oil development and provides for limited-duration agreements with international oil companies as contractors to provide specific services as needed without any say in oil production. Furthermore, the proposed legislation would place the Iraqi oil industry under the control of an appointed body that would include representatives of international oil companies as full voting members.
The key question that is evading an answer and probably causing major headaches in Washington is how to twist the arms of Iraqi MPs to take up the bill and push it through parliament. Definitely, it does not seem like an easy mission under the present geopolitics in strife-torn Iraq, but that is not stopping the US strategists from trying.
posted by Vivekanand PV at 7:48 AM
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