The oil factor

Asia Times has a two part article on Oil: The sovereignty showdown in Iraq. It is well worth reading. Here’s an extract;

By December 31, 2008, according to Iraqi Foreign Minister Hoshyar Zebari, the government of Iraq intends to have replaced the existing mandate for a multinational security force with a conventional bilateral security agreement with the United States – an agreement of the sort that Washington has with Kuwait, Saudi Arabia and several other countries in the Middle East.

The Security Council has always paired the annual renewal of its mandate for the multinational force with the renewal of a second mandate for the management of Iraqi oil revenues. This happens through the “Development Fund for Iraq”, a kind of escrow account set up by the occupying powers after the overthrow of the Saddam Hussein regime and recognized in 2003 by UN Security Council Resolution 1483. The oil game will be up if and when Iraq announces that this mandate, too, will be terminated at a date certain in favor of resource-development agreements that – like the envisioned security agreement – match those of other states in the region.

The game will be up because, as Antonia Juhasz pointed out last March in a New York Times op-ed, “Whose Oil Is It, Anyway?”:

    Iraq’s neighbors Iran, Kuwait and Saudi Arabia … have outlawed foreign control over oil development. They all hire international oil companies as contractors to provide specific services as needed, for a limited duration, and without giving the foreign company any direct interest in the oil produced.

By contrast, the oil legislation now pending in the Iraqi parliament awards foreign oil companies coveted, long-term, 20-35 year contracts of just the sort that neighboring oil producers have rejected for decades. It also places the Iraqi oil industry under the control of an appointed body that would include representatives of international oil companies as full voting members.

The news that the duly elected government of Iraq is exercising its limited sovereignty to set a date for termination of the American occupation radically undercuts all discussion in the US Congress or by American presidential candidates of how soon the US occupation of Iraq may “safely” end. Yet if, by the same route, Iraq were to resume full and independent control over the world’s third-largest proven oil reserves – 200 to 300 million barrels of light crude worth as much as $30 trillion at today’s prices – a politically incorrect question might break rudely out of the Internet universe and into the mainstream media world, into, that is, the open: Has the Iraq war been an oil war from the outset?

October 27, 2007 | 1 Comment »

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1 Comment / 1 Comment

  1. Shalom Ted,

    Just read the Jack Miles article.

    What does “limited sovereignty” mean? Does it relate to nearly being pregnant?

    I always thought the Iraq War was about Einsteinim reserves leveraged against Hillary’s cattle futures. (Asia Times is really a People Magazine with a more difficult vocabulary.)

    The world’s “largest oil pool” MIGHT be ANWR coupled to the 2 Yukon parks, Ivvavik and Vuntut National Parks.

    Apparently wildlife refuges and national parks are off limites to development. Of course, this affects the pricing of preexisting contracts in other areas such as the Middle East.

    Saudi Arabia, Iran and Iraq could probably hold as large a pool as the Beaufort Sea and onshore but more important than size is cost to lift and transport.

    Don’t know what “international law” means.

    “Trigger happy” means AT writer Jack Miles was not at risk.

    I do know the meaning of “prevailing
    international marketing best practices”.

    Kol tuv,

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