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.

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.

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.

I trust you will find the following of interests.
Read My Lips – Its the Oil Stupid