Thread: Archive Latest News - Think Tank - 16/08/07 - 03/11/07

LUKoil expects oil prices for Western, Central Europe to rise -1

28/ 08/ 2007

MOSCOW, August 28 (RIA Novosti) - LUKoil [RTS: LKOH], Russia's leading independent crude producer, said Tuesday it expected oil prices for consumers in Western and Central Europe, whose supplies have been reduced, to increase.

"Talks are ongoing with consumers in Germany, the Czech Republic, Slovakia and Poland on price increases," LUKoil CEO Vagit Alekperov told a news conference.

The CEO said LUKoil had been forced to redirect some Europe-bound oil supplies and reduce supplies to the four countries, due to reduced profitability.

He also told journalists that the board of directors of Gazprom Neft, the oil-producing arm of energy giant Gazprom, would consider setting up a joint venture with LUKoil on September 3.

"The documents are being prepared. Gazprom Neft's board of directors will consider the issue on September 3," Alekperov said.

LUKoil expects to launch talks with Iraq in September on restarting its contract signed in 1997 on the development of the giant West Qurna-2 oilfield in southern Iraq, he told the news conference.

"We hope that the law on oil in Iraq will be adopted in September, after which we'll be able to launch direct talks on renewing the contract," Alekperov said.

During talks in Moscow August 9, Iraq's oil minister, Hussain al-Shahristani, said that licenses for the country's operational and suspended oil fields, including West Qurna-2, would go to the National Oil Company, which will then select foreign companies as contractors.

LUKoil was unable to implement the West Qurna-2 contract due to UN sanctions against Iraq introduced after the 1991 Gulf War. Shortly before the fall of Saddam Hussein's regime in late 2002, Iraq said the West Qurna deal had been terminated over LUKoil's failure to meet its terms. The Russian company continues to consider the agreement as valid because it was signed until 2020.

However, Hussain al-Shahristani said at the talks in Moscow that LUKoil's contract had been suspended but not canceled.

The oil field previously held estimated reserves of 4 billion barrels, with capital investment for its development expected at around $4 billion. Al-Shahristani said Iraq had quadrupled proven oil reserves at the deposit.

Under the West Qurna deal, LUKoil held 68.5% and Iraq's SOMO organization 25%. LUKoil's majority shareholder (67.3%) is Russia's ING Bank (Eurasia), and U.S. oil major ConocoPhillips has a 20% stake in the crude producer. The U.S. company's interest in LUKoil is widely seen as an advantage for the Russian company in U.S.-controlled Iraq.

RIA Novosti - Business - LUKoil expects oil prices for Western, Central Europe to rise -1

Karbala clashes cause cancellation of Iraqi Central Bank auction on Wednesday

Baghdad - Voices of Iraq
Wednesday , 29 /08 /2007 Time 7:08:03

Baghdad, Aug 29, (VOI)- The clashes that erupted between gunmen and security forces in the Shiite sacred city of Karbala led to the cancellation of Wednesday's daily auction at the Iraqi Central Bank building, a trader said.
Ali al-Yasseri, a trader at the auction, told the independent news agency Voices of Iraq (VOI) "the participants of the current week sessions were less than the average due to the Shiite observance of a religious occasion but Karbala incidents discouraged traders to attend today's session causing the Central Bank to cancel the auction on Wednesday."
The city of Karbala, 108 km southwest of Baghdad, has been the scene of fierce clashes on Monday and Tuesday when gunmen clashed with police forces.
The clashes left 42 dead and up to 282 wounded.
The clashes took place in Karbala while the Shiite city was receiving hundreds thousands of Shiite pilgrims heading for the shrines of Imams al-Hussein and al-Abbas as a prelude to celebrate the birth anniversary of Imam al-Mahdi on Tuesday night and Wednesday morning.
On 8 August, the Central Bank also cancelled an auction session as the Iraqi capital then was placed under three-day-curfew fearing of possible attacks during the observing of a Shiite Muslims' occasion.
The Iraqi Central Bank runs a daily auction from Sunday to Thursday.
On Tuesday, Demand for the dollar was lower in the Iraqi Central Bank’s auction, reaching $48.235 million compared with $96.935 million on Monday.
In its daily statement the bank said it had covered all bids, including $6.265 million in cash and $42.570 in foreign transfers, at an exchange rate of 1,238 dinars per dollar, unchanged for the fourth session in a row.
The 14 banks that participated in Tuesday's session offered to sell $15 million, which the bank bought at an exchange rate of 1,236 dinars per dollar.
SK

Aswat Aliraq

Bush, Maliki discuss political developments

Baghdad, 29 August 2007 (Voices of Iraq)

Iraqi Prime Minister Nouri al-Maliki received a phone call from U.S. President George W. Bush in which he underlined recent "important developments" in the political process in Iraq, according to a statement made by the Iraqi premier's office.

"Bush and Maliki discussed on Monday evening the outcome of the Iraqi prime minister's multi-leg regional tour that took him to neighboring Turkey, Syria and Iran," read the statement received by the independent news agency Voices of Iraq (VOI).

Maliki stressed his keenness to activate the political process, underscoring the importance of having all parliamentary blocs, particularly the (Sunni) Iraqi Accordance Front (IAF), participate in the process, the statement noted.

"The days ahead will see significant positive developments," Maliki emphasized.

The statement also quoted Bush as praising the initiatives adopted by the Iraqi premier.

Bush had phoned Iraqi President Jalal Talabani and commended the Iraqi leader's agreement on vital issues, referring to the quintuple agreement signed by the four main Kurdish and Shiite parties and the (Sunni) Iraqi Islamic Party.

The four main Kurdish and Shiite powers in addition to the Sunni Iraqi Islamic Party signed on August 26 a new joint statement with the aim of pushing forward the political process and opening doors before the blocs that have quit the government.

The agreement was signed by Maliki, leader of the (Shiite) Dawa Party, Talabani, leader of the Patriotic Union of Kurdistan (PUK), Kurdistan region's President Massoud Barazani, the leader of the Kurdistan Democratic Party (KDP), Vice President Adel Abdul-Mahdi, representing Abdul-Aziz al-Hakim's Supreme Islamic Iraqi Party (SIIC), and Tareq al-Hashimi of the Iraqi Islamic Party.

Bush, Maliki discuss political developments | Iraq Updates

President Talabani confirms the government's ability to impose law and inclusiveness in the political process

Luna / August 29 / Baghdad / The President Jalal Talabani said the Iraqi government was serious in seeking to impose the rule of law in the country and to prosecute all offenders and criminals.

He added in a press conference held upon his arrival airport Aslemanih that the Prime Minister as the General Commander of the Armed Forces is now in holy Karbala for this purpose.

Asked on the possibility of replacing Prime Minister Maliki, the president said that there was an alternative to Iraqi Prime Minister Nuri al-Maliki is the same Maliki.

And on the Iranian bombardment of the border areas in Kurdistan president said : We discussed the matter in this issue with the Iranian ambassador in Iraq Apical Mr. Kazemi, who assured us that the bombing will soon.

And on the feasibility of meetings and interviews conducted in Baghdad with a number of political leaders, President Talabani that the meetings were very fruitful and that the outcome will be more effective than the former, revealing the existence of a genuine desire and the determination of all sides to participate on the statement quintet.

It should be noted that the president held several meetings and meetings with political elites in Baghdad over the past weeks to involve everyone in the political process and not marginalize any party dedicated to the new Iraq and the believers march of democracy.

The President was received upon his arrival airport Sulaymaniyah Deputy Prime Kurdistan Kosert Messenger and the number of other government officials / / completed / p u / Presidency of the Republic.

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Little progress seen on Iraq goals

By MATTHEW LEE and ROBERT BURNS, Associated Press Writers
1 hour, 44 minutes ago



WASHINGTON - Congressional auditors have determined that the Iraqi government has failed to meet the vast majority of political and military goals laid out by lawmakers to assess President Bush's Iraq war strategy, The Associated Press has learned.

The Government Accountability Office, or GAO, will report that at least 13 of the 18 benchmarks to measure the surge of U.S. troops to Iraq are unfulfilled ahead of a Sept. 15 deadline for Bush to give a detailed accounting of the situation eight months after he announced the policy, according to three officials familiar with the matter.

The officials, who spoke on condition of anonymity because the report has not been made public, also said the administration is preparing a case to play down its findings, arguing that Congress ordered the GAO to use unfair, "all or nothing" standards when compiling the document.

The GAO is to give a classified briefing about its findings to lawmakers on Thursday. It is not yet clear when its unclassified report will be released but it is due Sept. 1 amid a series of assessments called for in January legislation that authorized Bush's plan to send 30,000 more troops to Iraq, where there is now a total of more than 160,000 troops.

Among those Bush will hear from are the Joint Chiefs of Staff; Defense Secretary Robert Gates; the commander of U.S. forces in Iraq, Gen. David Petraeus; and the U.S. ambassador to Iraq, Ryan Crocker. The Pentagon said Wednesday Bush was likely to get a variety of views from different military officials. Bush will then deliver his own report to Congress by Sept. 15.

The GAO report comes at a pivotal time in the Iraq debate. So far, Republicans have mostly stood by Bush on the war and staved off Democratic demands for troop withdrawals. But in exchange for their support, many GOP members said they wanted to see substantial progress by the government of Iraqi Prime Minister Nouri al-Maliki by September or else they would call for a new strategy, including possibly a troop withdrawal.

The GAO, the congressional watchdog, is expected to find that the Iraqis have met only modest security goals for Baghdad and none of the major political aims such as passage of an oil law.

The White House declined to comment on the specific findings of the GAO report, which one official said would put the Iraqi government's success rate at about 20 percent.

"While we've seen progress in some areas, it would not surprise me that the GAO would make this assessment given the difficult congressionally mandated measurement they had to follow," said Gordon Johndroe, spokesman for the National Security Council.

An internal White House memorandum, prepared to respond to the GAO findings, says the report will claim the Iraqis have failed on at least 13 benchmarks. It also says the criteria lawmakers set for the report allow no room to report progress, only absolute success or failure.

The memo argues that the GAO will not present a "true picture" of the situation in Iraq because the standards were "designed to lock in failure," according to portions of the document read to the AP by an official who has seen it.

By contrast, the memo says, a July interim report on the surge called for the administration to report on "progress" made toward reaching the wide-ranging benchmarks.

The July report said the administration believed the Iraqis had made satisfactory progress on eight of the 18 benchmarks. It graded six as unsatisfactory and said two were mixed. It said it was too early to judge the remaining two.

The GAO, however, has been told to "assess whether or not such benchmarks have been met," and the administration plans to assert that is too tough a standard to be met at this point in the surge, the officials said.

"It's pretty clear that if that's your measurement standard a majority of the benchmarks would be determined not to have been met," said one official. "A lot of them are multipart and so, even if 90 percent of it is done, it's still a failure."

At the Pentagon, spokesman Geoff Morrell previewed the administration's response to the GAO report, comparing it unfavorably to the July findings.

"The standard the GAO has set is far more stringent," he told reporters. "Some might argue it's impossible to meet."

Morrell said Bush's top military advisers, including Gates, would give the president their opinions "directly and in an unvarnished way."

"The objective ... is not to reach consensus," he said. "That may be the end result, but that's not what he (Gates) is looking for. He is looking for a way to sort of make sure that the normal bureaucratic massaging that sometimes eliminates the rough edges or the sharp differences between individuals does not victimize this process, so that the president can get distinct — if that's the way it turns out to be — points of view on where we are and where we need to go."

Little progress seen on Iraq goals - Yahoo! News

Iraq: the oil and the endgame

August 29th 2007

The invocation by George W. Bush of the United States' humiliation in Vietnam adds to the impression that US strategy in Iraq is now aimed not at victory but at the avoidance of defeat.

But the USA has not given up on one of its main objectives: control of Iraqi oil.

Former United States diplomat Peter W. Galbraith recently observed that:

The case for the war is no longer defined by the benefits of winning—a stable Iraq, democracy on the march in the Middle East, the collapse of the evil Iranian and Syrian regimes—but by the consequences of defeat.

In reality, Galbraith argues, the US has already lost the war:

Iraq after an American defeat will look very much like Iraq today—a land divided along ethnic lines into Arab and Kurdish states with a civil war being fought within its Arab part. Defeat is defined by America's failure to accomplish its objective of a self-sustaining, democratic, and unified Iraq. And that failure has already taken place, along with the increase of Iranian power in the region.

Galbraith's proposal, which he implies would have the support of Hillary Clinton, other prominent Democrats and even the more realistic of the Republicans, is for the US military to retreat to a secure base in Kurdistan:

The argument for so doing is straightforward: it secures the one part of Iraq that has emerged as stable, democratic, and pro-Western; it discharges a moral debt to our Kurdish allies; it deters both Turkish intervention and a potentially destabilizing Turkish– Kurdish war; it provides US forces a secure base that can be used to strike at al-Qaeda in adjacent Sunni territories; and it limits Iran's gains.

Galbraith did not mention one other compelling argument: the Kurdish region of Iraq contains very substantial deposits of petroleum.

Casus belli

Depending on estimates, Iraq has either the second or the third largest global reserves of that substance. Oil is not only by far the world's most important source of energy, but is also the source of great profits to several of the worlds largest corporations. Yet in the in the build-up to the war, the contention that Iraq's oil resources might be a factor in US policy was was emphatically denied. As the Washington Post reported:

"There are certain things like that, myths, that are floating around," Rumsfeld told Steve Kroft of CBS Radio in November 2002. "It has nothing to do with oil, literally nothing to do with oil."

Pro-war experts pointed out what they claimed was a fatal flaw in the 'oil war' analysis. Writing for Business Week in March 2003, Nobel prize-winning economist Gary S. Becker argued:

If oil were the driving force behind the Bush Administration's hard line on Iraq, avoiding war would be the most appropriate policy...

Since oil is sold in a fluid world market, any nation, including the U.S., can get pretty much all the oil it wants by paying world prices. So the U.S. would be better off if it encouraged Iraq to export more, not less, oil because that would lower oil prices. Yet America has not done this. Since the Persian Gulf War, it has led the international community in restricting Iraqi production as a means of pressuring Saddam Hussein to dismantle his weapons of mass destruction.

Outbreak of a war in Iraq would cost the U.S., not save it, large sums of money. Already the runup to war has sent oil prices spiraling upward, imposing, in effect, a large tax on all energy consumers. War would initially cause prices to escalate further...

Consequently, if the major driver of American policy toward Iraq were concern about oil and its cost, it would be best to avoid a Middle East conflict and the risk of much higher prices. A war with Iraq is not about oil. It is about Saddam Hussein and the threat he poses to his neighbors, his people, and to nations around the world.

From Becker's next article about Iraqi oil, published in June 2003, it appeared that having conquered Iraq to save the Iraqis and others from Saddam, the occupiers then discovered that they had the responsibility to decide- purely on the grounds of efficiency- what should be done with the country's petroleum resources. The Nobel prizewinner was on hand with some timely and cautious advice- immediate privatisation carried out directly by the occupying forces would convey the wrong impression:

An important advantage of leaving most privatizations to the new Iraqi government is that the coalition would avoid charges that it 'gave away' assets to favored foreign and local companies. Still, coalition administrators can provide a timetable for privatizing, drawing on the experiences of other nations that have done so.

Obviously, it is immensely important to crank up the country's oil production: For the immediate future, those revenues will be the leading contributor to Iraq's gross domestic product...

The Iraqi oil industry would be far more efficient if it were extensively privatized. But even a democratically elected Iraqi government could not immediately challenge the emotion in the Middle East behind government ownership of oil. Such a government might be able to transfer many complementary oil activities to the private sector through competitive open bidding by international consortiums that include Iraqi and other Middle East participants. Among these activities are maintenance of production facilities, refining of oil to produce gasoline and other products, exploration for additional deposits, and transportation of oil.

Thus Becker envisaged a situation in which Iraq would have a government which is nominally democratic, but in fact operates according to a 'timetable' set in the USA. As he suggested, plenty of experience had been accumulated in the former USSR and Central Europe, and in many other countries, for the practice of this kind of democracy.

The hand on the spigot

The argument put by Gary S. Becker on the eve of the March '03 invasion works as proof that achieving the lowest possible world market price for petroleum in the short term is not the consistent over-riding objective of US policy. Other evidence also bears this out. Also in March 2003, former Saudi oil minister Sheikh Zaki Yamani told the BBC that:

US interests would not be served by a very low price.

A number of US states are oil producers, and a low price of oil these states would hit them hard, he said.

When the price of oil collapsed in 1986, George Bush senior - then US Vice President - asked Saudi Arabia to raise the price of oil, he recalled.

"America does not want a very low price of oil, that is obvious," said Sheikh Yamani.

It could be added that low oil prices can also hurt the earnings of the oil companies. Three US oil companies- Exxon-Mobil, Chevron and ConocoPhillips- have declared combined profits of $72.7 billion in 2007.

However, Sheikh Yamani expressed to the BBC his firm view on the importance of oil in motivating the invasion of Iraq:

He said the US is aiming to secure its oil supplies. In his view, the US wants to reduce its dependence on oil from the Gulf, and from Saudi Arabia in particular.

He said the US accused Saudi Arabia of being the main source of terrorist activities, backing them financially and ideologically...

For the US, he said, the real answer is to have Iraqi crude.

Iraq could quadruple its current level of oil production - taking it to eight million barrels a day - by the end of the decade, he said.

And much of it could be exported via the Eastern Mediterranean Sea, ending US dependence on oil passing through the Strait of Hormuz - a narrow waterway leading out of the Gulf.

Yamani's remarks are illuminating. In terms of global political power, the issue is not so much the level of the oil price but who controls the oil price. Traditionally, the US has used its relationship with Saudi Arabia to influence petroleum prices; but that causes the United States to be overly dependent on its relationship with a country whose loyalty may not be reliable. And the USA also needs to guarantee its own supplies of oil.

Black visions

That somebody might wish to control energy supplies in order to politically dominate other countries is publicly recognised by US and other Western elites- except that such motivations are never applied to their own side. Vladimir Putin, for example, is routinely accused of using the gas produced in his own country as a means of blackmailing other European nations. And during the Congressional election campaign in November 2006, feeling the need to augment the case for US troops to stay in Iraq, George W. Bush was reported as follows in the Washington Post:

"You can imagine a world in which these extremists and radicals got control of energy resources," he said at a rally here Saturday for Rep. Marilyn Musgrave (R-Colo.). "And then you can imagine them saying, 'We're going to pull a bunch of oil off the market to run your price of oil up unless you do the following. And the following would be along the lines of, well, 'Retreat and let us continue to expand our dark vision.' "

Bush said extremists controlling Iraq "would use energy as economic blackmail" and try to pressure the United States to abandon its alliance with Israel. At a stop in Missouri on Friday, he suggested that such radicals would be "able to pull millions of barrels of oil off the market, driving the price up to $300 or $400 a barrel."

The Washington Post report included an official clarification:

White House spokesman Tony Fratto said Saturday that Bush's latest argument does not reflect a real shift. "We're still not saying we went into Iraq for oil. That's not true," he said. "But there is the realistic strategic concern that if a country with such enormous oil reserves and the corresponding revenues you can derive from that is controlled by essentially a terrorist organization, it could be destabilizing for the region."

...Fratto... argued that even if radicals could not move the markets dramatically with Iraqi oil, they would use the country as a base to topple other governments in the Middle East such as Kuwait and Saudi Arabia, which would give them "a lot more oil to blackmail with."

It is only natural for US leaders to impute to others the idea of restricting the supply of essential items, produced in ones own country or in territories under ones control, to other nations in order to achieve political ends. When the USA does this, it's not called blackmail, it's called sanctions. But to wield global power it is usually not necessary to issue direct threats. The mere fact of the US military presence in and around the territory of oil-exporting countries is enough to influence political decisions in other oil-importing countries, allies and potential rivals alike.

Blame Marx, not Mohammed

In his June 2003 Business Week article, Gary S. Becker was careful to absolve Islamic ideas of responsibility for what he called the "decades of economic stagnation in Iraq" and other countries in the Middle East:

Many attribute this lack of economic success to the influence of Islam on Middle Eastern culture. But this assertion ignores the fact that traditional Islam is perhaps more sympathetic than Christianity to private enterprise and a market economy. Muhammad, after all, was a merchant before he received the revelation. The Koran teaches respect for private property, business contracts, and trade.

Instead, he put the blame on ideas and practices of more recent origin:

The main obstacle to modern economic development for Middle Eastern nations has been bad policy, often inspired by the teachings of Karl Marx and other Western intellectuals. State enterprises and government regulations still dominate the economies of Egypt, Iran (under both the Shah and the mullahs), Iraq, Saudi Arabia, and Syria. Important industries, including oil production and refining, are controlled directly by the government or by private monopolies that depend on the state.

Becker's assertion fits neatly with neo-liberal ideology, but does not fit the facts. Under conditions of nationalisation and state planning, Iraq's GDP grew by a very impressive 8.7% per annum between 1960 and 1978. Much of the revenue from oil exports was invested in infrastructure and a massive expansion of the education system. Iraq's decades of decline began with the costly eight-year war with Iran; this was succeeded by the mass destruction of the country's industry and infrastructure by the USA during the 1991 Gulf War; subsequent recovery was blocked by twelve years of sanctions.

Nevertheless. The invasion of Iraq offered an opportunity to begin reversing the nationalisations which took place in the OPEC countries during the 1960s and '70s. Gary S. Becker continued:

Coalition forces in Iraq have the chance to set an example for Islamic nations everywhere by promoting prosperity for the downtrodden and disadvantaged through market policies.

But as Becker noted, the downtrodden masses do not appreciate that privatisation would bring them prosperity: instead, they are 'emotionally' attached to the idea of state ownership of oil resources. Hence the need for the occupying power to hold Iraq's 'sovereign' government to timetables for reform.

Iraq's proposed hydrocarbon law was drafted according to US instructions, with input also from the British government and Western oil company lobbyists. Securing its enactment is part of official US policy; it is entrenched in the recommendations of the Iraq Study Group and the President's 'New Way Forward'. The IMF insists that forgiveness of some of Iraq's debt is dependent on the passing of the legislation. While re-establishing a state owned Iraqi National Oil Company and giving it a role in maintaining pipelines and extracting oil from fields which are already being exploited, the law provides for the leasing of the country's vast untapped reserves to foreign companies for periods of up to 35 years, on the basis of licences which are known in the industry as Production Sharing Agreements (PSAs).

The type of contract under which companies can participate in exploiting the oilfields is a key issue. In Saudi Arabia, Kuwait and other Gulf countries, foreign technology is brought in to the petroleum extraction process by means of service contracts with transnational corporations. The oilfields are owned by the state, and production is controlled by state-owned companies.

PSAs are usually permitted by states in areas where it is likely either that oil may not be found, or that the cost of extracting it may be high; thus a company is rewarded by the possibility of a high profit for risking its investment. The corporations which hope to exploit Iraq's easily accesible reserves face risks which are political, rather than geological.

Other provisions of the proposed law add to the weakening of the role of the Iraqi state in relation to the transnational oil firms. The legislation puts a new entity called the Federal Oil and Gas Council in charge of managing hydrocarbon resources and making contracts with companies. This body is to include provincial representatives, who are likely to represent competing local and sectarian interests, and also the chief executives of oil and gas companies. The central state is further undermined by clauses which allow regions to negotiate their own separate deals with foreign oil companies.

Union-led opposition

But as with other aspects of the US intervention in Iraq, serious difficulties have emerged. Since the draft law was published it has faced resistance from many sectors of Iraqi society. In December 2006, the leaders of Iraq’s five trade union federations, representing half a million organised workers, issued a statement denouncing the draft oil law as privatisation by stealth. They called for the the state owned Iraqi National Oil Company to be given preference in the award of contracts over foreign-owned firms.

While the daily headlines about Iraq cover car bombs, kidnapping and sectarian bloodshed, the struggle against this plunder of the country's resources has not been as widely reported. Oil workers have campaigned against the oil law by going on strike and mobilising street demonstrations.

Anti oil law protests are led by The Iraqi Federation of Oil Unions (IFOU), representing more than half the oil industry’s workforce in the Shia populated provinces of Basra, Maysan, Dhi Qar and Muthana; historically the bedrock of the Iraqi labour movement.

Hundred of Iraqi intellectuals have signed a statement opposing the oil law and proposing that it be put to a referendum. An opinion poll conducted in June and July indicates that the proposed law would be overwhelmingly defeated if a referendum were to be held.

The administration in Baghdad reacted angrily to mass protests, issuing arrest warrants for the president of the IFOU unions, Hassan Jumaa Awad al-Assadi, and his fellow leaders. Iraqi Oil minister Hussain al-Shahristani told UPI: “there are no legal unions in Iraq.” According to a letter written by the general director of the Iraqi oil ministry on 18th July 2007:

"The minister has directed the prohibition of cooperation with any member of any union in any of the committees organised under the name of the Union, as these unions do not enjoy any legal status to work inside the public sector."

The Iraqi government has opted to retain Saddam’s 1987 anti-union decree which deemed all public sector workers to be civil servants, and banned employees of state-owned enterprises from joining trade unions. But union activity has continued.

In July 2007, Hassan Jumaa Awad al-Assadi brought the message of the Iraqi oil workers to London. Speaking in a meeting organised by the UK Support Committee for IFOU, Al Assadi outlined the problems for Iraq’s future if the US backed oil law is approved:

“We will lose control over Iraqi oil. Therefore, the social progress in Iraq will be curtailed substantially, because the private oil companies want huge profits; they are not concerned about the environment, wages or living conditions.”

He added that the US and Britain have put heavy pressure on the Iraqi government to pass the new law in the face of mounting public opposition. Al Assadi noted that after four years of bloody occupation:

“It’s not logical for the US to come out empty-handed: they want their hands full of Iraqi oil.”

Al Assadi called upon Iraqi politicians to learn from the courage of the revolutionary leader and founder of the Iraqi Republic, President Kassem; who in 1961 issued Law No. 80. Under this law, 95.5% of the Iraqi territory that had been under the control of British and American oil companies was expropriated and placed under public ownership.

The Fadhila Party and Muqtada al-Sadr's organisation, which between them dominate street-level reality in much of the south of Iraq, have also declared their opposition to the oil law.

Best laid plans

Another difficulty for the oil law's US sponsors has resulted partly from the success of the USA's own policy of facilitating the emergence, in the words of Peter W. Galbraith, of the "stable, democratic, and pro-Western" government in Iraqi Kurdistan. The Kurdistan Regional Government (KRG) is already allowing five of its oilfields to be drilled by foreign companies, and its representatives have so far been unwilling to accept the majority view in the Iraqi cabinet that the Iraqi National Oil Company should have any substantial role in the Kurdish region. This factor has contributed to the continuing failure to put the legislation before the Iraqi parliament.

In early August, the Kurdish Regional parliament approved its own hydrocarbon law, giving the green light to further oil privatisation on the basis of Production Sharing Agreements. KRG Natural Resources Minister Ashti Hawrami declared:

"I am enjoying seeing a young but fast maturing democracy at work."

This depends on how one defines democracy. The opinion poll carried out by KA Research found that a clear majority of those interviewed in Iraqi Kurdistan, like all the other areas of Iraq, were of the view that their country's oil should be developed and produced by state-owned companies.

As Reuters has reported, the big oil corporations are preparing their takeover bids for the smaller companies, including DNO of Norway, Canada's WesternZagros and the Turkish firm Petoil, which are beginning to pump the crude from Kurdistan. The article explained:

Initially, mid-sized firms were more likely to get involved in buyouts and new contracts in the Kurdish region than majors.

The majors would be more cautious as they have their eyes on potentially much bigger prize of Iraq's largest oilfields in the south.

Corporate security policies ban majors from sending personnel into Iraq, including the Kurdish region. Until security improves, they can't do more than sign deals.

With big oil potentially sidelined for years due to security, a similar pattern could emerge in the south as in the Kurdish region with smaller companies moving in first and becoming buyout targets later.

Facing increasingly blatant signals from the USA that they will be replaced if they fail to deliver on the most important of the benchmarks, Iraqi government ministers are now insisting that the long-delayed oil law will be put before Iraq's parliament and passed during September 2007. But even if that is achieved, it will be no guarantee of long-term success for US policy. Daniel Litvin, an expert on 'corporate social responsibility ' who is a former policy advisor to the transnational mining comany Rio Tinto plc, cautioned in the August issue of Prospect Magazine:

...that the US is widely known to be pushing the current oil legislation, and to favour major involvement by foreign firms, creates the ideal conditions for a domestic backlash against such investment at a later stage, in particular once America has quit the country.

In whatever form the current oil legislation is eventually passed, any future Iraqi government looking to prove to its voters that it is no longer an American puppet would likely seek to rewrite this legislation as a symbolic first step, forcing any foreign firms granted access to renegotiate their contracts or even to surrender them.

Litvin's phrase "once America has quit the country" suggests some kind of clean break which would leave Iraqis in political control of their own resources. Such a scenario does not appear among the various plans for avoiding defeat which the factions of the US elite are considering. But so far in Iraq- as in other parts of the 21st Century world- many things are not going quite according to plan for the United States of America.

http://21stcenturyso******m.com/arti...ame_01522.html

Iraqi prime minister says he won't resign, can't be deposed

Wed Aug 29

BAGHDAD — Looking tired and pale but speaking firmly, Iraqi Prime Minister Nouri al Maliki told McClatchy Newspapers Tuesday that he has no intention of resigning de****e rising U.S. criticism of his government.

In a 50-minute interview in his office in Baghdad's Green Zone, Maliki strongly defended his tenure in office and said that he doesn't expect to be forced from office. He said his efforts at national reconciliation, not the surge of additional U.S. troops or actions by Iraqi security forces, are responsible for improved security.

He blamed the United States and its early policies in Iraq for the sectarianism that plagues the country, and said he opposed the current U.S. policy of working with former Sunni Muslim insurgent groups who've turned against al Qaida in Iraq because that, too, promotes sectarianism.

Still, he said he isn't yet willing to send Americans home.

"Now there is a need for them to stay on," Maliki said. "When the security situation becomes stable, the need will no longer be there."

The interview was Maliki's first with an American news organization since U.S. officials began a drumbeat of criticism against him last week.

Democratic Sens. Carl Levin of Michigan and Hillary Clinton of New York called for the Iraqi parliament to replace him, the U.S. ambassador to Iraq called the government's performance "extremely disappointing" and a new assessment of Iraq by the U.S. intelligence community predicted that Maliki's government would grow even weaker over the next 12 months.

Maliki, however, appeared unbowed.

"I wish to give reassurance: Those who speak about pushing out the present regime, whether Carl Levin or Mrs. Hillary Clinton or the French Minister of Foreign Affairs, who apologized for his remarks— none of these pose a real threat to the continuance of this government and the continuance of the political process," he said.

"As for the Iraqi politicians, our partners in the Iraqi government, they pose no threat even if they called for our resignation, for they have no authority within the democratic frame to depose us."

At one point, asked if Iraq's parliament could agree on anything, let alone replacing him, he laughed and said, "So, the government is safe, then."

He said he has the support of Iraq's supreme Shiite religious leader, Grand Ayatollah Ali al Sistani, and that he talks to him regularly. He said he'd stopped meeting with fiery Shiite cleric Muqtada al Sadr , whose supporters in parliament were critical to his election, because Sadr no longer is influential even within his own movement.

"I will not abandon my legal and legitimate responsibility in serving Iraq . Neither do I see any legitimate patriotic reason to resign," Maliki said. "If there is some stagnation in the political process, I have taken the necessary steps to move forward . . . ."

Taking a page from the book of American rhetoric of democracy and tolerance, he said democracy would keep him in power.

"I did not come to this position from being a king or a prince, but have reached here through a political process, democracy and national will," he said. "I did not come here by hereditary right, neither is there a hierarchy in Iraq today."

He was especially dismissive of any suggestion that groups opposed to him would topple him in a military coup.

"This is a sick mentality, a hangover, from the Baathist era (of Saddam Hussein )," he said. "The era of coups has departed. This country will see no more such overthrows."

But he said he'd welcome being dismissed from office if Iraq's parliament decided to do so.

"Indeed, I would cheer it on because for the first time we would have effected change through political means and not by weapons and tanks," he said.

Throughout the interview, Maliki quietly rejected the most frequently cited criticism of him: that he favors the interests of Shiite Muslims over those of other ethnic groups and has looked the other way as Shiite militias have forced Sunni residents from their Baghdad homes.

He said that his own party, Dawa, the smallest in the Shiite United Iraqi Alliance , had gained the least from his government and portrayed himself as an Iraqi nationalist besieged by political self-interest.

"Truly the political process is a novel experience for Iraqis," he said. "The political parties want to pressure me into concessions, and I want the interest of Iraq to dominate all. I admit if there is a flaw, it is the immaturity of our people regarding the political project and its principles."

He also said that he felt no obligation to protect Sadr and his supporters simply because they provided the votes that put him in power.

"I owe no one for reaching this position of authority," he said. "Yes, they supported me— and I thank them for that— all of them, the Kurds, the Arabs, the Sadrists. But there is no pact between me and any of them that I should present them with anything on the account of the constitution and national interests."

Maliki said he's proven that he's a nationalist by attacking Shiite outlaws, including the Mahdi Army in the south and a Shiite cult, the Soldiers of Heaven, in Najaf. He called the Mahdi Army outlaws and said that elements of Saddam's former regime had infiltrated its ranks.

He showed no allegiance to Sadr. They've met twice, once before he became prime minister and once after, and the true power lies with someone else, he said.

"He has big problems within the movement; that is why I have meetings with leaders from the movement, but not with Moqtada," he said. "Perhaps what is holding back our talks is my firm rejection of the policies adopted by the movement."

De****e Maliki's confidence, the scene at his office made it clear that his survival isn't being debated only in Washington . Maliki's security guards were closely watching a talk show on a wide screen Panasonic television in the lobby. The topic was whether Maliki is the only choice for Iraq , and political pundits were debating whether the prime minister should step down.

When Maliki entered, the guards turned down the volume, but kept the program on.

Maliki's day included an hour-long interview with a Shiite television station and an hours-long meeting with an unnamed Sadrist. When the interview with McClatchy finally began, four hours late, he scolded his staff for making reporters wait.

He said he shares many of the goals the United States has for Iraq . "They speak of a stable Iraq that espouses democracy and human rights, that has good relations with its regional neighbors. It denounces dictatorship and has common interests with the U.S.," he said. "We also want that Iraq should be democratic, constitutional, federal, that it should be built upon principles of justice and equality between its sons; a country peacefully coexisting in its regional environment."

But he said the Americans were trying to take credit for things that his government had accomplished.

"The positive development in the security situation is owed to national reconciliation much more than to our security forces or coalition troops. Some would want to hide this fact, but it is a fact not to be hidden," he said.

He also said he believed the Americans are exacerbating sectarian tensions by building up Sunni groups that have turned on al Qaida and that he would reject incorporating any former insurgent with coalition or Iraqi blood on his hands into the Iraqi security forces.

"The support for the Sunnis is something we do not accept— because we do not agree to support either Sunnis or Shiites," he said.

Normally stiff in public, Maliki was warm and personable in person. He turned stern, however, when asked if he ever regretted becoming prime minister.

"I will never regret a moment in the legitimate service of my country and my people," he said. "I will feel regret only if I feel I have not done enough or if I abandon my responsibility. As for results, this is a job for generations. I will accomplish something, my successor will accomplish something, and his successor will accomplish something until the process is complete."

Iraqi prime minister says he won't resign, can't be deposed - Yahoo! News

Iraqi oil law set to pass with majority

30th August 2007

DUBAI: Iraq's draft oil law should pass by a comfortable majority when parliament meets to discuss it after the end of its summer break in September, Iraqi Vice President Adel Abdul-Mahdi said.

"The oil law was completed in cabinet... the draft that was approved in cabinet is the one that will be presented to parliament," he said.

"The parliament remains now in recess and will return at the start of September when we will reaffirm that the law will be presented to the parliament."

The controversial federal oil law has been approved by the Iraqi government after months of talks but has yet to be debated by parliament, which must approve it if it is to pass into law.

The law, which decides who controls the world's third-largest oil reserves, is now in limbo while Iraq's parliament takes its summer break.

No date has been set to debate the law, which aims to provide a legal framework to attract foreign investment and sets up a new state oil firm to oversee the sector.

Washington has pushed Iraq for months to speed up its passage and that of other legislation, which it sees as pivotal to reconciling warring Iraqis, rebuilding Iraq's shattered economy and attracting foreign investment.

The draft oil law aims resolve the sharing in oil profits and most of the reserves are in the Kurdish north and south of the country.

But there has been fierce debate over the shares and how much control regional governments will have over the existing and undiscovered oil reserves, as well as the sorts of contracts that will be included.

Abdul-Mahdi said that some appendices to the law could be included to ensure the broadest possible political consensus, even though the law was expected to pass comfortably as it is.

"There are some parliamentary blocs that call for the addition of some appendices to this law. Fine, the committee is studying this and the appendices could be included in this law de****e the fact that if the voting took place in parliament now... the law would be expected to pass with a comfortable majority," Abdul-Mahdi said.

"But in the interests of national consensus, it is seen that their addition would be more beneficial and get a higher level of consensus than the comfortable majority that would be expected if it was presented now."

Gulf Daily News

Higher oil income to spur growth

30th August 2007

DUBAI: Iraqi economic growth may accelerate this year, spurred by higher oil revenue, the country's deputy central bank governor said yesterday.

Iraq's economy, which relies on oil for almost all its export revenue, grew 6.2 per cent last year thanks to higher oil prices.

US crude oil prices hit a record $78.77 a barrel on August 1.

"Growth may be significantly more than 6.2pc, but part of it will depend on the sale of crude oil and the price," Ahmad Mohamad Al Juboory said.

The International Monetary Fund said earlier this year it expected the economy to grow about 6.3pc in 2007.

Iraq produced 2.07 million barrels of oil per day last month, making it the Middle East's fifth-largest producer, according to a Reuters survey. Juboory also said the central bank is considering three applications from Iraqi investors to set up banks, including one that complies with Islamic law.

"The banking sector is profitable and by helping it expand it is developing the economy," he said.

Gulf Daily News

Shell-Dow in $2bn Iraq plant expansion talks

30th August 2007

DUBAI: Royal Dutch Shell and Dow Chemical are in talks with the Iraqi government to renovate and expand a chemical plant in southern Iraq at a cost of up to $2.1 billion, the Iraqi industry minister said.

The talks on creating a joint venture or reaching a profit-sharing agreement could be concluded this year, Fawzi Hariri said.

"We are looking to upgrade this, and evaluate what type of products and facilities we need for the local market and beyond," Hariri said of the plant near the city of Basra.

Alexandra Wright, a spokeswoman for Shell in London said: "We are in talks with the Iraqi government and third party organisations on a range of issues.

"The nature of those discussions is a matter of commercial confidentiality."

Shell, like the other western oil majors, is eager to gain access to Iraq's oil reserves - the third-largest in the world - although security concerns mean the companies are reluctant to put people on the ground.

Traditional hostility to foreign investment in their oil industries on the part of Gulf states could also prove to be a barrier to Shell or others gaining access to upstream reserves in Iraq.

However, investment in lower-return downstream projects such as refineries, gas terminals or petrochemical facilities can sometimes be a stepping stone for foreign firms in such situations.

US State Department spokesman Tom Casey said the US welcomed foreign investment in Iraq.

"Part of the puzzle that needs to be solved and dealt with as Iraq continues to develop its political system, is to provide economic opportunity for the people there and to provide jobs," he said.

Iraq, which produces most of its crude in the south of the country, pumped 2.07 million barrels per day last month, making it the Middle East's fifth-largest producer, according to a Reuters survey this month.

Gulf Daily News