Iraq poised to hand control of oil fields to foreign firms

Baghdad is under pressure from the United States and Britain to pass an oil law which would hand long-term control of Iraq's energy assets to foreign multinationals, according to campaigners. Iraqi trade unions have called for the country's oil reserves–the second-largest in the world–to be kept in public hands. But a leaked draft of the oil law would see the government sign away the right to exploit its untapped fields in so-called exploration contracts, which could then be extended for more than 30 years. Control of oil is an explosive political issue in Iraq. Hasan Jumah Awwad al-Asadi, leader of the country's oil workers' union formed after the invasion in 2003, warned this month: "History will not forgive those who play recklessly with the wealth and destiny of a people." With much of the country on the brink of civil war, and a fractious government in Baghdad, campaigners say Iraq is in a poor position to negotiate with foreign oil firms. "Iraq is under occupation and its people are facing relentless insecurity and crippling poverty. Yet, with the support of our government, multinationals are poised to take control of Iraq's oil wealth," said Ruth Tanner, senior campaigner at War On Want. The law, which is being discussed by the Iraqi cabinet before being put to the parliament, says the untapped oil would remain state-owned but that contracts would be drawn up giving private sector firms the exclusive right to extract it. "There is this fine line, that the wording is seeking to draw, that allows companies to claim that the oil is still Iraqi oil, whereas the extraction rights belong to the oil companies," says Kamil Mahdi, an Iraqi economist at Exeter University. He criticized the US and Britain, saying: "The whole idea of the law is due to external pressure. The law is no protection against corruption, or against weakness of government. It's not a recipe for stability." Alan Simpson, member of the British Parliment said: "This confirms the view of those who have said all along that the war in Iraq was not about weapons of mass destruction, but the control of the levers of mass production…. This is a cartel carve-up by the occupying powers." Oil production in Iraq has slipped to below two million barrels a day–less than before the invasion–and the US and Britain argue that Iraq urgently needs foreign investment to boost output. But Ewa Jasiewicz, of the campaign group Platform, said all the other Gulf states had kept production in government hands. "Iraq could borrow the money to develop its industry, and pay that off through oil revenues."