Basra, Iraq – On Monday, hundreds of Iraqis, led by the Iraqi Federation of Oil Unions (IFOU), took to the streets of Basra to demand that the Iraqi Parliament reject the proposed Oil Law. [1]
Simultaneous demonstrations took place in Amara and Nassiryya. Local governate officials made statements in support of the demonstration and, along with the governor of Basra, have committed to sending letters to the Minister of Oil supporting the Union’s demands.
Hassan Juma’a Awad al Assadi, President of the IFOU, charges that the proposed Oil Law surrenders Iraq’s economic sovereignty to multinational oil companies: “‘We will lose control over Iraqi oil. Therefore, the social progress in Iraq will be curtailed substantially, because the oil companies want huge profits; they are not concerned about the environment, wages, or living conditions…” The IFOU calls for immediate and complete withdrawal of all foreign forces from Iraq. The union represents 26,000 members in 10 state oil and gas companies across four governorates in the south of Iraq.
The Union was moved to public protest after initiating a strike on June 4, 2007 over a range of workplace issues and in opposition to the proposed Oil Law. IFOU leaders have said their members are prepared to strike again in defense of their nationalized oil industry. Iraq’s oil has been in the public sector since the 1970s.
The call to demonstrate was also sparked by increased pressure by the Bush Administration on the Iraqi Parliament to pass the Oil Law which would open two thirds of Iraq’s oil to foreign control through contracts that could last as long as 30 years.
Adoption of the law is one the benchmarks imposed on Iraq by the U.S. as a condition of continued reconstruction aid and support for the Maliki government.
Unions, other organizations and individuals around the world are calling on their elected representatives to demand that the U.S. government stop pressuring the Iraqis to pass the Oil Law. In the U.S., the labor and anti-war movements are calling on members of Congress who say they’re against the war to drop the Oil Law benchmark and cease all U.S. pressure on the Iraqis to transform their oil industry for the benefit of multinational oil corporations.
For video of the demonstration use this link: http://www.liveleak.com/view?i=cee_1184590207
[1] Demands from the Iraqi Federation of Oil Unions to Parliament include to:
(1) reject the proposed oil law;
(2) expel the current Oil Minister;
(3) abolish the recently announced hike in oil and gas prices in Iraq; and
(4) pass a law to establish labor rights and legalize trade unions.
I read this story at Common Dreams, but REB 84 decided to change the title and link to another article that was not picked up by the mainstream media.
I trust you will find the following of interests.
Read My Lips – Its the Oil Stupid
We need to start getting this out there. In informed public allows for the possibility of action.
What proof is there that the Bush administration if demanding that Iraq’s parliament agree to giving 87.5% (some say 2/3rds) of its oil or oil revenues to US oil companies who are supposedly going to develop that country’s oil infrastructure?
I’ve seen the claim many times, but never in the mainstream media and I cannot find any clear statement to that effect in the proposed oil law itself.
I participate in several online discussion groups and many participants in these groups are raising this same question.
If you can help us clarify this, please do.
Hi Richard,
That’s a really good question. This is an interim reply. Steve, who has been covering this more closely than I, will get back to you later today. It is my understanding that the answer is essentially in the graphs of the law itself, and you can see those on Oil Change’s Iraqi Oil Law page.
You have to work out what proportion of Iraq’s oil is open to foreign investment – the way the law is written is determined by the annexes of the law and if you look at the total value of fields that are reserved for INOC (Iraqi National Oil Company), versus the fields that are potentially open to foreign investment, it equates to two thirds being open to foreign investment.
Hi Richard,
Steve asked me to comment on this (I’m from PLATFORM, a UK-based partner of Oil Change).
There are 2 elements to this:
1) which oilfields are given to foreign oil companies – ie what proportion of reserves; and
2) within any field, what proportion of profits is given to them.
I’ve not seen the 87.5% figure, but I don’t believe it is accurate, on either question.
On the second question, the profit split will be decided field-by-field, so there’s no single figure for all fields. The sharing mechanisms can be quite complex, so often it’s only by economic analysis with a spreadhseet that the terms can be assessed. I have heard some rumours, suggesting outrageously profitable terms – many times what could be achieved anywhere else in the world. Perhaps that is unsurprising, as Iraq is an occupied country, so inevitably any contractual terms would reflect the interests of the occupying powers, rather than the Iraqi people. Yet, according to the oil law, although signed under occupation, these contracts would last up to 30 years.
On the first question, the answer is still unclear, as it is the subject of closed negotiations in Baghdad. Iraq has about 76 known oilfields, listed in the appendices of the oil law. Those appendices said that 27 would remain in Iraqi hands, 25 developed by foreign oil companies ‘in partnership’ with the Iraq National Oil Company, and 26 developed exclusively by foreign companies – thus to some degree, the likes of Exxon and Chevron would have control over two thirds of known fields.
However, the Kurdish political parties objected to this, that it didn’t give ENOUGH (!) away to the companies. As a result, the appendices have now been dropped, with all decisions on which fields to give to foreign companies to be made by the new Federal Oil and Gas Council, without any parliamentary scrutiny – thus the likelihood is that even more will be surrendered to the oil companies.
Furthermore, Iraq has the largest oil exploration potential of any country in the world. Recent analysis by IHS Energy suggests that oil reserves yet to be found are as large as those already known. And under the oil law, these would all be controlled by foreign oil companies. Thus, however the 76 fields are divided, multinational oil companies would ultimately control a majority of Iraq’s oil reserves – perhaps two thirds or even more.
This would make Iraq unique among the major oil producers of the Middle East, where oil production is all in the public sector, as it has been in Iraq since the 1970s.
The good news, however, is that opposition to the oil law in Iraq is getting stronger by the day. The trade unions, especially the oilworkers mentioned in this article (www.basraoilunion.org) are very strong in their opposition. This week, over 100 of the most senior Iraqi oil and finance experts wrote to the Iraqi parliament, calling for the law not to be passed in its current form. It is also opposed by other civil society and religious groups, and even some political parties.
Against that, the US and UK governments are placing immense pressure – political, economic and military – on the Iraqi government to pass this law. There is an urgent need for action by civil society around the world, in solidarity with those brave Iraqis who are saying no to the oil law and no to the occupation.