DIVIDE RULE AND PLUNDER

Iraqis are being left in the dark about the real consequences of the proposed oil law Maliki and Bush are trying to impose on Iraq, writes Nermeen Al-Mufti


The law of oil and gas, due for debate at the parliament, has caused much controversy outside the country. Unfortunately, the local media has treated it as routine news, failing to explain its full significance to the public. The forceful manner in which the occupation authorities keep pushing for that law is alarming, especially at a time when all construction work in the country has ground to a halt due to widespread disturbances. If the law is passed, experts argue, US and multinational companies would benefit at Iraq's expense.

Parliament is divided over the law. Those who don't mind a divided Iraq praise the law for its "fair" distribution of oil revenues. The Kurds, who were hoping to get the lion's share of oil revenues, oppose the law; so do others who believe that the law would lead to the partition of the country.

Most recent governments have promised a fair distribution of oil revenues. Every government had a plan, but none of them have been implemented. One plan was to give an allowance from oil money to employees along with their monthly salaries, but how would people not working for the government get their share? Iraq is now importing fuel from abroad, although it has the second largest oil reserves in the world. Iraq still suffers from fuel shortages, although the government has removed oil subsidies upon the advice of the World Bank.

Jenan Ali, an expert in Iraqi affairs, says that Secretary of State Condoleezza Rice asked Prime Minister Nuri Al-Maliki to pass the new law. President Bush has on more than one occasion expressed the same wish. All of this is indication, Ali says, that the US president wants oil as a trophy.

"The US president wants to feel that he won the oil, although he lost the war." Ali dislikes the obtuse phrasing of the law. "Concerning contracts with foreign companies, we don't know if the companies in question intend to operate the existing fields or develop new ones."

According to the draft law, the revenues of oil and gas would be distributed among the entire nation, in accordance with the population density of every region. The law gives the regions the right to negotiate and sign oil deals. But no agreement is final unless approved by the central government.

Issam Al-Chalabi was Iraq's petroleum minister from 1978- 1990. A much-respected expert both at home and abroad, Chalabi says that the law is a "ready-made recipe to divide Iraq." Speaking to Al-Ahram Weekly, he admits that the country needs an oil law. "It also needs to restructure the Ministry of Petroleum, but is this the right time?"

The government in Kurdistan has drawn up laws to attract investment and signed contracts to develop the petroleum industry. Such behaviour, Chalabi argues is "hasty". He calls on Iraqi oil experts to urge the postponement of the law. The law should be discussed only after constitutional amendments are approved, he says.

"The oil sector in Iraq needs maintenance. The petroleum industry is in a terrible condition as a result of the general situation in the country. Petroleum installations have been subject to a lot of sabotage, smuggling, and looting."

According to Chalabi, racketeers have sabotaged Iraqi pipelines to steal oil and smuggle it to neighbouring countries. The smugglers use small boats in the Shatt Al-Arab sea passage. There are seven docks on the Shatt Al-Arab, all controlled by politically-backed militias and racketeers, he says. "The losses exceed $1 billion a year." Chalabi fears that due to the vagueness of the law foreign corporations would exploit existing oil fields instead of developing new ones.

Following a symposium about the law, 61 Iraqi oil experts signed a petition to parliament in which they questioned the "timing" of the law, its "compatibility" with the constitution, and its "economic value" for the country as a whole.

Opposition to the law doesn't come solely from experts such as Chalabi. Prominent politicians also spoke out against the law. One is Abdul-Hadi Al-Hassani of Al-Daawa Party (the prime minister's party), who noted his objections to the law during a seminar he organised in London.

The law is supposed to set up a central body -- the Federal Council for Oil and Gas (FCOG) -- to draw up oil policies. The FCOG would ask "an office of independent advisers" to help out with technical details regarding concessions, contracts and production.

An Iraqi oil expert, speaking on condition of anonymity, told the Weekly that the "office of independent advisers" could be just another name for giant US corporations. "The new law would place Iraq's oil fields in the hands of foreign companies for decades, and after the companies have their cut, the Iraqis would be left short, perhaps with as little as 14 per cent of the revenues," the expert said.

Meanwhile, Prime Minister Maliki has invited Iranian companies to build four oil refineries in south Iraq. The Iraqi Petroleum Ministry has confirmed that Iranian companies will be submitting bids for the refineries. If the Iranians have their way, they would seize a large portion of Iraq's oil, refine it and export it through a pipeline passing through Abadan, experts say.

A parliamentarian speaking to the Weekly on condition his name be withheld said that it would be a mistake to pass the law first and amend it later, as some are trying to do. That would leave the country in a debacle similar to the one created by the hastily-approved constitution, he remarked.

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