Fight for control of Iraq's oil reserves
New Zealand Herald
July 18, 2007

Long before coalition troops arrived in Iraq in 2003, anti-war campaigners warned that President George W. Bush's real motive was to grab its oil.

While the violence continues to rage, workers in the devastated country's energy industry are warning that America and Britain are pressing Baghdad to hand over control of its oil industry to foreign multinationals.

Hassan Jumaa Awad al Assadi, the head of the Iraqi oil workers' union, was in London last week campaigning against a new law which, he says, will give the oil giants unprecedented rights to his country's vast reserves.

"We will lose control over Iraqi oil. The social progress in Iraq will be curtailed substantially, because the oil companies want huge profits; they are not concerned about the environment, wages, or living conditions," he warned. "We will wait to see the reaction of the Iraqi people."

Baghdad has reacted angrily to the union's campaign, issuing arrest warrants for al Assadi and his fellow leaders, and refusing to recognise the 26,000-strong confederation of workers.

Al Assadi said that Washington and London had put heavy pressure on the Iraqi Government to persuade it to pass the new law.

"It's not logical for the US to come out empty-handed: they want their hands to be full of Iraqi oil," he said. "One of our criticisms is the way the law was proposed - under a veil of secrecy."

In Saudi Arabia, Kuwait and other Gulf producers, foreign investors are brought in under "service contracts", while the ownership of the reserves remains in state hands. Under the new Iraqi law, however, contracts for up to 30 years would be signed, giving foreign investors a share of the profits in new fields.

"It is a false assumption to say we are against foreign companies participating; but it has to be on our conditions, which respect the interests of Iraq.

"Oil revenues represent 85 to 90 per cent of Iraqi income. Such a law should only be passed when we have full sovereignty, and the wishes of the people are manifested."

The US claims that Iraq needs the involvement of foreign investors to bring up-to-date expertise and cash, and permit the exploitation of new reserves.

However, energy pressure group Platform, which has been supporting al Assadi's campaign, points out that the Government is failing to disburse current oil revenues.

There are currently US$21 billion ($26 billion) of cash reserves in the Iraqi central bank. Al Assadi warned any multinationals planning to invest in the country that they could face fierce opposition from the Iraqi people. "I have warned the oil companies before, there will be some consequences," he said.

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