Iraq: The Racket Continues

In my earlier blog entry Iraq Withdrawal ? Keep dreaming, I discussed how a withdrawal from Iraq after the Democrats gained control of Congress was highly unlikely given that the US objectives in Iraq had not yet been met.

Briefly, here again are the US objectives in Iraq:

1. Geo-political dominance in the Middle East
2. Control of scarce resources (oil). Note that I just mean control, I don't mean physically increasing oil production in the near future (that can happen after a withdrawal)
3. Have complete control of the so-called "Democratic" process in Iraq via a constitutional fiction.

We're seeing the signs (public signs anyway) of formal agreements being drafted to secure control over the oil resources. Contrary to the now expected blatant lies from US policy makers, the US has quietly made plans to secure extremely favorable terms for its oil corporations.

Iraq Study Group (ISG)

The damage control plan also known as the "Iraq Study Group" (ISG) calls for the United States to assist in privatizing Iraq's national oil industry providing direct technical assistance and opening up the country to exploitation by foreign oil companies. (see this excellent analysis on the Privatization of Iraq's oil by Antonia Juhasz on this aspect of the Iraq Study Group). The ISG states that "the United States should assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise." Juhasz documents clearly the nexus between James A. Baker III and Lawrence Eagleburger of the ISG and their previous efforts to expand trade with Iraq (i.e. Saddam Hussein). In July 2006, 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. This clearly indicates how important it is to oil companies that Iraq's oil resources be privatized as soon as possible. Obviously, this is heavily at odds with the security situation in Iraq. So the motto appears to be: "Sign the law first, security comes later" (anyway security is paid for by the American taxpayer and American and Iraqi lives). This is also consistent with the ISG's recommendation on starting "withdrawal" from Iraq in 2008 because that is probably when they expect the security situation in Iraq to somewhat stabilize. Such a stabilization would be the much awaited cue for oil companies to further stamp their authority at which point (after all, all the groundwork would already have been setup by that point), we would probably see a huge influx of personnel and technology to exploit the oil in Iraq (The real 'Mission Accomplished')


Production-Sharing Agreements

The ISG recommendation is consistent with the fact that the US has hired a consultancy firm (Bearing Point) which has a representative working in Iraq (quietly for many months) finalizing the official agreement on restructuring the Iraq oil industry (and there you were distracted by the hanging of Saddam Hussein and expecting miracles from the Democrats).

According to the latest scoop (How the West will profit from Iraq's most precious commodity) from the Independent (as of today), "the new oil law has quietly been going through several drafts, and is now on the point of being presented to the cabinet and then the parliament in Baghdad. Its provisions are a radical departure from the norm for developing countries: under a system known as "production-sharing agreements", or PSAs, oil majors such as BP and Shell in Britain, and Exxon and Chevron in the US, would be able to sign deals of up to 30 years to extract Iraq's oil."

The article discusses at length the contents of a 40 page leaked document which lays the groundwork for the new agreement. This agreement will almost certainly damn Iraq to many many years of exploitation of its resources. As expected, the local 'constitutional fiction' has not had much input into this agreement that defines Iraq's future.

So assuming that this agreement will be signed into law, one of the conditions for withdrawal will have been met. However, the security situation needless to say, is horrendous and will require several years more to stabilize (even with a surge or whatever the favorite term is at this moment). It doesn't matter whether the Democrats or Republicans are in power as far as Iraq and foreign policy are concerned. They don't call the shots.


"Oil belongs to the Iraqi people; the government has... to be good stewards of that valuable asset "
George Bush; Press conference, 14 June 2006