Vol. 71/No. 11      March 19, 2007

Some capitalist politicians from Sunni- and Shiite-led factions have said they will try to block passage of the law in the Iraqi parliament. The head of Iraq's Federation of Oil Unions opposes the law on the grounds that it opens up the country's vast oil and gas reserves to extensive foreign investment.

The draft law empowers the central government to distribute oil revenues to Iraq's 18 provinces based on population. Washington has pressed Baghdad for a new oil law along these lines to draw wealthy Sunnis and other Iraqi capitalists into establishing a stable regime friendly to U.S. interests in the Middle East. Iraq's largest oil fields are located in the Kurdish-populated north and Shiite-populated south. Wealthy Sunnis, who dominated the government under Saddam Hussein, have been fighting to ensure a good portion of the oil riches will remain theirs.

U.S. ambassador to Iraq Zalmay Khalilzad spent weeks in intense negotiations to reach a compromise with Kurdish regional government officials, who have clashed with Baghdad in the last year over signing contracts with foreign oil companies and collecting revenues. The deal reached allows the Kurdish and other regional governments to negotiate and sign such contracts, which will now have to be reviewed by Baghdad.

Saleh al-Mutlaq, leader of the Sunni-led National Dialogue Front, said his group opposes the draft oil law. "It divides the country and the wealth into groups," he said. Wealthy Sunnis also argue that distribution of oil revenues based on population would be unfair because there is no accurate census of Iraq's population. These capitalist politicians reject claims that Sunnis are a minority. Sunni Arabs are generally estimated to be 20 percent of Iraq's population, Kurds 20 percent, and Shiite Arabs 60 percent.

The draft law opens the way for foreign oil companies to plunder Iraq's oil, which was nationalized in 1972. In return for their investments, foreign companies would be able to sign long-term contracts at favorable terms. These include exporting oil after paying a minimum 12.5 percent royalty, substantial tax breaks, and keeping 20 percent of profits. In other oil-producing countries in the region foreign companies are allowed to keep 10 percent of profits.

"We want a new, different law, which will be in the interests of Iraqis," Hassan Jum'ah Awwad al-Asadi, head of the Federation of Oil Unions, told Time magazine. "If there is no solution we can stop production, stop exports."
 
 
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U.S. forces in Afghanistan kill at least 23 civilians
March 17-18 rallies across U.S.: ‘Pull the troops out of Iraq now!’
Washington demands Pakistani rulers do more to fight ‘terror’  
 
 
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