Saturday, December 09, 2006

THE OIL PASHAS

"As the recommendations of the Iraq Study Group are more thoroughly considered, we should remain ever vigilant and wary of corporate war profiteers in pragmatist's clothing."
~ Antonia Juhasz.


First off, there is a relatively new Kurdish blog in both English and Kurdish called Agir û Roj, and their most recent post has to do with the Kurdish flag and anthem controversies. I would encourage them to continue to post on a regular basis even if only once a month. Keep your work alive, hevals.

Next, what are the real intentions behind the Iraq study group (ISG) recommendations? According to Antonia Juhasz, the intentions can be drawn from four proposals of the report:


The report calls for the United States to assist in privatizing Iraq's national oil industry, opening Iraq to private foreign oil and energy companies, providing direct technical assistance for the "drafting" of a new national oil law for Iraq, and assuring that all of Iraq's oil revenues accrue to the central government.


Can anyone say, "Mossadegh?"

The article describes James Baker's long-term interests in Iraq, all centered around "trade," and going back to 1982 "when Reagan removed Iraq from the list of countries supporting terrorism . . . " The lifting of Iraq from The List of the time, made it so much more convenient for the US to fight Iran through its own proxy and client state, Iraq. James Baker, Lawrence Eagleburger, and Kissinger Associates made a killing back in the 80s, and also created a monopoly of trade with Iraq, at least for the US, through an organization called the US-Iraq Business Forum:


The Forum was a trade association representing some 60 American companies, including Bechtel, Lockheed, Texaco, Exxon, Mobil, and Hunt Oil. The Iraqi ambassador to the United States told a Washington, D.C., audience in 1985, "Our people in Baghdad will give priority -- when there is a competition between two companies -- to the one that is a member of the Forum."


In fact, as Juhasz notes, the director of the Forum traveled to Iraq and met with Saddam in 1989 (after the Anfal Campaign). That trip was the result of the specific Bush 41 decision to make a few bucks--nevermind the messy business of genocide:


. . . in 1988 [ ] the Bush transition team argu[ed] that the United States would have "to decide whether to treat Iraq as a distasteful dictatorship to be shunned where possible, or to recognize Iraq's present and potential power in the region and accord it relatively high priority. We strongly urge the latter view." Two reasons offered were Iraq's "vast oil reserves," which promised "a lucrative market for U.S. goods," and the fact that U.S. oil imports from Iraq were skyrocketing. Bush and Baker took the transition team's advice and ran with it.


According to Juhasz, the Baker family was heavily invested in several oil firms at the start of the Gulf War, with Baker's family law firm having represented oil clients, and others, for decades, while Eagleburger was involved with Halliburton. Behind the facade of media hype for security, or media hand-wringing over bringing "democracy" to Iraq, the oil pashas are firmly in control of the entire situation:


This past July, U.S. Energy Secretary Bodman announced in Baghdad that senior U.S. oil company executives would not enter Iraq without passage of the new law. Petroleum Economist magazine later reported that U.S. oil companies put passage of the oil law before security concerns as the deciding factor over their entry into Iraq. Put simply, the oil companies are trying to get what they were denied before the war or at anytime in modern Iraqi history: access to Iraq's oil under the ground. They are also trying to get the best deal possible out of a war-ravaged and occupied nation.


Therefore, the idea of the US "providing direct technical assistance for the "drafting" of a new national oil law for Iraq," sounds a lot like the idea of Turkish generals providing "direct technical assistance for the 'drafting' of a new" Turkish constitution--which is exactly what happened with the current Turkish constitution. Since it is widely known that the Turkish constitution was written to protect the state against the citizens, how can we be sure that US assistance in the writing any law governing Iraqi oil resources won't be weighted in favor of protecting the oil pashas and their interests from the rightful beneficiaries of Iraqi oil--the people of Iraq?

It should come as no surprise that the oil pashas are recommending that the status of Kerkuk be put off until sometime in the hazy, distant future, and it explains why the US has delayed setting up any commission to sort out the problem of Saddam's arabization of Kerkuk. This may also mean that the oil pashas have no intention of allowing a Turkish invasion of South Kurdistan, which would be carried out specifically to guarantee Turkish control the oil of Kerkuk, as well as the oil of South Kurdistan.

The Financial Times has some information about international oil groups dreaming of the day they can enter Iraq to plunder the very resources that should go to the people of Iraq:


American troops stood by as government offices in Baghdad were torched and looted after the city’s fall in April 2003, a chaotic beginning to the flawed US-led campaign in Iraq. But one imposing concrete building was accorded special treatment.

Ringed with barbed wire, with dozens of US tanks guarding the entrance and American soldiers perched on roofs, the oil ministry emerged unscathed from the post-invasion mayhem. US officials insisted at the time that their objective was to safeguard the centre of Iraq’s vital resources. The US military’s actions, however, fed the conspiracy theory that the toppling of Saddam Hussein was itself designed to gain control of Iraqi oil.

[ . . . ]

Big oil companies have enjoyed record profits from their global operations in the past two to three years. But the groups are finding themselves increasingly squeezed out of promising projects that could bolster their proved reserves.

[ . . . ]

The big groups are therefore seeking to prepare for the day when they will be able to enter Iraq, trying to create closer relationships with Iraqi officials and to gain information about oilfields in ways that do not require visits to the country.


It seems that the Financial Times confirms Antonia Juhasz's observations about the ISG recommending that the US take the lead in sorting out the legalities surrounding Iraqi oil resources, and what the status of those resources will be in the future--all for the benefit of foreign oil companies, naturally. The Financial Times also mentions the unresolved issue of control of newly discovered oil deposits, a point which is at the heart of Kurdish efforts to extract oil recently discovered in Behdinan.

Although the Financial Times doesn't mention it, the overthrow of Iran's Mohammed Mossadegh in the 1950s, by the US and UK, was specifically a result of Mossadegh's attempts to nationalize Iranian oil. But the idea of a country keeping control over its own resources is not unique to Iran, as the Financial Times notes:


. . . a trend towards resource nationalism has seen governments, such as in Venezuela and Russia, wresting control of important fields away from foreign operators. Saudi Arabia, Kuwait and Mexico, which own the world’s three biggest individual oilfields, have kept their doors shut.


The Associated Press is reporting on the development of the drafting of the new Iraqi oil law, carried on KurdishMedia:


"We have reached important agreements. I cannot put a timeframe on when it will be ready, but we are very keen on achieving that as soon as possible," Deputy Prime Minister Barham Saleh, a Kurd who chairs the committee, said. "We hope that we will reach a comprehensive agreement that will enhance the oil sector and make oil a unifying factor to all Iraqis."

[ . . . ]

A report by a high profile bipartisan U.S. commission released Wednesday recommended that the U.S. government work with the Iraqis to come up with a clear, legal framework for oil investment as soon as possible. It also suggested that the U.S. military work with Iraqi and private security forces to protect oil facilities.

Also speaking to the AP, Oil Ministry Spokesman Assem Jihad said the government hoped that the new law, which has to be approved by the Cabinet and parliament before it comes into force, was partially designed to encourage foreign investment in the oil sector, whose woes began with the imposition of sweeping U.N. sanctions on Iraq following its 1990 invasion of Kuwait.


By the way, I wouldn't put any money on the claim that a boost in oil exports will help the Iraqi economy. The only thing we can be certain of is that Iraqi oil exports will help the personal economies of all those involved in the ISG. Will the oil exports help the personal economies of the Southern Kurdish leadership? Why not? After all, the KRG balks at providing basic services to the people, refuses to invest in the basis of a Kurdish agricultural economy while squandering money on useless Western-style development projects that only the elites will be able to use. At the same time, cities of some 60,000, like Penjwin, have no proper medical facilities and have to worry about buying overpriced heating fuel from Iran so that the people can survive the winter.

With conditions like these, will the KRG nationalize future Kurdish oil resources, or will those resources be privatized for the personal interests of the ruling elites?

This is a hard question for which the Kurdish people should demand an answer. The resources of Kurdistan are the inheritance of the Kurdish people, and all revenues from these resources should go to the benefit of the Kurdish people.

No oil pashas in Kurdistan. Not now; not ever.

4 comments:

Anonymous said...

Mizgin, I may be a starry-eyed dreamer, but why not alot shares of all the govt-owned oil assets to the people of Kurdistan? This wd be a way to ensure that the $$ is shared and not wasted. For example:

1 share for every local resident, adult or child, aggregated into households
1 share for every peshmerga vet
1 share for every widow
1 share for every wounded vet
1 share for every disabled vet
1 share for every person imprisoned by the Baath
1 share for every person disabled by the Baath
1 share for every Iraq army vet
1 share for every wounded Iraqi army vet
1 share for every disabled Iraqi army vet
1 share for every person who assists in capturing a terrorist

In this way, quite a number of people would be alotted 5,6,7 shares (or you can fiddle w/the #s for "weighting" purposes, maybe give a widow or a disabled PM 5 shares, etc). If it averaged out 4 shares for each person, that wd be ~15 million shares, total for southern Kurdistan. I'll bet the N Iraq oilfields generate at least $1 billion annually, if the govt share is ~50% (I have no idea, just correct me if I'm way off) that wd be ~ $33/share. An average household wd probably have 10-12 shares (kids wd earn fewer shares), thus something like $330-400 in dividend income every year wd come in.

The shares wd be negotiable 3 months after issue, so as to stabilize the market and ensure there is no manipulation. Assuming a dividend of $33, a share wd have a conservative value of $400 each (8.25% annual return).

This way the people wd get both benefit and legal title to the oil wealth, and make it both difficult and unrewarding to steal it.

Keça Agir said...

Thank you very much Mizgin for your comment on Agir u Roj Blog. It is encouraging to see support from someone as active as you. Thanks for the support on behalf of Agir u Roj team, who are regular visitors of Rasti Blog. Keep up the spirt!

Mizgîn said...

Philip, I am willing to hear any plan for a just distribution of revenues. The KRG must also be perfectly transparent in all current plans for the revenues. It must publish information regarding revenues so that everyone can see where these revenues are going, how they are being spent.

Sipasî xweş, Keça Agir. Please continue to write because more is needed in English, not only for Kurds worldwide, but for non-Kurds as well. Even if you post something only once a month, but do it regularly, it will be immensely helpful for the cause. If you can do more, please do it.

SERKEFTIN!

Anonymous said...

Mizgin, needless to say, economic transparency is of absolute importance when dealing with such a precious commodity as petroleum.

BTW, who is Philip? ;- )