Thread: Iraq/Dinar News. 09/05 to 01/14/07

Originally Posted by rvalreadydang

Oil for Sale: Iraq Study Group Recommends Privatization
By Antonia Juhasz

The Iraq Study Group may not have a solution for how to end the war, but it does have a way for its corporate friends to make money. In its heavily anticipated report released on Wednesday, the Iraq Study Group made at least four truly radical proposals.

The report calls for the United States to assist in privatizing Iraq's national oil industry, opening Iraq to private foreign oil and energy companies, providing direct technical assistance for the "drafting" of a new national oil law for Iraq, and assuring that all of Iraq's oil revenues accrue to the central government.

President Bush hired an employee from the U.S. consultancy firm Bearing Point Inc. over a year ago to advise the Iraq Oil Ministry on the drafting and passage of a new national oil law. As previously drafted, the law opens Iraq's nationalized oil sector to private foreign corporate investment, but stops short of full privatization. The ISG report, however, goes further, stating that "the United States should assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise." In addition, the current Constitution of Iraq is ambiguous as to whether control over Iraq's oil should be shared among its regional provinces or held under the central government. The report specifically recommends the latter: "Oil revenues should accrue to the central government and be shared on the basis of population." If these proposals are followed, Iraq's national oil industry will be privatized and opened to foreign firms, and in control of all of Iraq's oil wealth.

The proposals should come as little surprise given that two authors of the report, James A. Baker III and Lawrence Eagleburger, have each spent much of their political and corporate careers in pursuit of greater access to Iraq's oil and wealth.

"Pragmatist" is the word most often used to describe Iraq Study Group co-chair James A. Baker III. It is equally appropriate for Lawrence Eagleburger. The term applies particularly well to each man's efforts to expand U.S. economic engagement with Saddam Hussein throughout the 1980s and early 1990s. Not only did their efforts enrich Hussein and U.S. corporations, particularly oil companies, it also served the interests of their own private firms.

On April 21,1990, a U.S. delegation was sent to Iraq to placate Saddam Hussein as his anti-American rhetoric and threats of a Kuwaiti invasion intensified. James A. Baker III, then President George H.W. Bush's secretary of state, personally sent a cable to the U.S embassy in Baghdad instructing the U.S. ambassador to meet with Hussein and to make clear that, "as concerned as we are about Iraq's chemical, nuclear, and missile programs, we are not in any sense preparing the way for preemptive military unilateral effort to eliminate these programs."*

Instead, Baker's interest was focused on trade, which he described as the "central factor in the U.S-Iraq relationship." From 1982, when Reagan removed Iraq from the list of countries supporting terrorism, until August 1990, when Iraq invaded Kuwait, Baker and Eagleburger worked with others in the Reagan and Bush administrations to aggressively and successfully expand this trade.

The efficacy of such a move may best be described in a memo written in 1988 by the Bush transition team arguing that the United States would have "to decide whether to treat Iraq as a distasteful dictatorship to be shunned where possible, or to recognize Iraq's present and potential power in the region and accord it relatively high priority. We strongly urge the latter view." Two reasons offered were Iraq's "vast oil reserves," which promised "a lucrative market for U.S. goods," and the fact that U.S. oil imports from Iraq were skyrocketing. Bush and Baker took the transition team's advice and ran with it.

In fact, from 1983 to 1989, annual trade between the United States and Iraq grew nearly sevenfold and was expected to double in 1990, before Iraq invaded Kuwait. In 1989, Iraq became the United States' second-largest trading partner in the Middle East: Iraq purchased $5.2 billion in U.S. exports, while the U.S. bought $5.5 billion in Iraqi petroleum. From 1987 to July 1990, U.S. imports of Iraqi oil increased from 80,000 to 1.1 million barrels per day.

Eagleburger and Baker had much to do with that skyrocketing trade. In December 1983, then undersecretary of state Eagleburger wrote the U.S. Export-Import Bank to personally urge it to begin extending loans to Iraq to "signal our belief in the future viability of the Iraqi economy and secure a U.S. foothold in a potentially large export market." He noted that Iraq "has plans well advanced for an additional 50 percent increase in its oil exports by the end of 1984." Ultimately, billions of loans would be made or backed by the U.S. government to the Iraqi dictator, money used by Hussein to purchase U.S. goods.

In 1984, Baker became treasury secretary, Reagan opened full diplomatic relations with Iraq, and Eagleburger became president of Henry Kissinger's corporate consultancy firm, Kissinger Associates.

Kissinger Associates participated in the U.S.-Iraq Business Forum through managing director Alan Stoga. The Forum was a trade association representing some 60 American companies, including Bechtel, Lockheed, Texaco, Exxon, Mobil, and Hunt Oil. The Iraqi ambassador to the United States told a Washington, D.C., audience in 1985, "Our people in Baghdad will give priority -- when there is a competition between two companies -- to the one that is a member of the Forum." Stoga appeared regularly at Forum events and traveled to Iraq on a Forum-sponsored trip in 1989 during which he met directly with Hussein. Many Kissinger clients were also members of the Forum and became recipients of contracts with Hussein.

In 1989, Eagleburger returned to the state department now under Secretary Baker. That same year, President Bush signed National Security Directive 26 stating, "We should pursue, and seek to facilitate, opportunities for U.S. firms to participate in the reconstruction of the Iraqi economy, particularly in the energy area."

The president then began discussions of a $1 billion loan guarantee for Iraq one week before Secretary Baker met with Tariq Aziz at the state department to seal the deal.

But once Hussein invaded Kuwait, all bets were off. Baker made a public plea for support of military action against Hussein, arguing, "The economic lifeline of the industrial world runs from the Gulf and we cannot permit a dictator such as this to sit astride that economic lifeline."

Baker had much to gain from increased access to Iraq's oil. According to author Robert Bryce, Baker and his immediate family's personal investments in the oil industry at the time of the first Gulf War included investments in Amoco, Exxon and Texaco. The family law firm, Baker Botts, has represented Texaco, Exxon, Halliburton and Conoco Phillips, among other companies, in some cases since 1914 and in many cases for decades. (Eagleburger is also connected to Halliburton, having only recently departed the company's board of directors). Baker is a longtime associate and now senior partner of Baker Botts, which this year, for the second year running, was recipient of "The International Who's Who of Business Lawyers Oil & Gas Law Firm of the Year Award," while the Middle East remains a central focus of the firm.

This past July, 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. Petroleum Economist magazine later reported that U.S. oil companies put passage of the oil law before security concerns as the deciding factor over their entry into Iraq. Put simply, the oil companies are trying to get what they were denied before the war or at anytime in modern Iraqi history: access to Iraq's oil under the ground. They are also trying to get the best deal possible out of a war-ravaged and occupied nation. However, waiting for the law's passage and the need to guarantee security of U.S. firms once they get to work, may well be a key factor driving the one proposal by the Iraq Study Group that has received great media attention: extending the presence of U.S. troops in Iraq at least until 2008.

As the recommendations of the Iraq Study Group are more thoroughly considered, we should remain ever vigilant and wary of corporate war profiteers in pragmatist's clothing.

*All quotes are referenced in my book, "The Bush Agenda."

Oil for Sale: Iraq Study Group Recommends Privatization | Iraq Updates

More pressure from Bush. Sure the Kurds are getting more and more cheesed off to.

Originally Posted by CharmedPiper

All the news sounds pretty good lately....I wonder if there will be an auction on Sunday or if it will be our big day!!!! Any guesstimations....???

I'm loving each day because I know the party is not far off. Thanks allot for all your info and support.


V/R

Al

Originally Posted by Adster

Interesting, cannot get into this site now.....anyone else??? Any ideas what Aemarih means?! Am thinking something like 'very'.....

My translator said that word does not belong in the sentence.

Here is how he said it should read without that word.

وتجدر الاشارة الى ان العام المقبل سيشهد ثورة كبيرة، وسوف تسهم في تقليص حجم البطالة وتعزيز الامن والاستقرار في العراق.

It should be noted that the coming year will witness great revolution, and will contribute to reduce unemployment and enhance security and stability in Iraq.

Originally Posted by Inscrutable

My translator said that word does not belong in the sentence.

Here is how he said it should read without that word.

وتجدر الاشارة الى ان العام المقبل سيشهد ثورة كبيرة، وسوف تسهم في تقليص حجم البطالة وتعزيز الامن والاستقرار في العراق.

It should be noted that the coming year will witness great revolution, and will contribute to reduce unemployment and enhance security and stability in Iraq.

Thanks, makes sense.

Originally Posted by PlatanoKing

2006 Holiday Name

Jan 1 New Year’s Day
Jan 10 Eid al Adha (Feast of Sacrifice) (4 Days)
Jan 31 Islamic New Year
Feb 9 Ashura
Mar 21 Norus (Persian New Year)
April 10 The Prophet’s Birthday
May 1 Labor Day
Jul 14 Republic day
Aug 21 The Prophet’s Ascension
Oct 23 Eid al Fitr (End of Ramadan) (2 Days)
Dec 31 Eid al Adha (Feast of Sacrifice) (4 days)
Here is the Eid al Fitr Appearing again...Coincidences?Iraq 2006 Public Holidays and Bank Holidays

Eid al Fitr:

Children are normally given gifts or money. Women (particularly relations) are normally given special gifts by their loved ones. Eid is also the time for reconciliations. Feuds or disputes, especially between family members, are often settled on Eid.

More here: 'Id al-Fitr: Definition and Much More from Answers.com

Two EIDs coming actually: Dec 31, 06 to Jan 3, 07 - four days
and Jan 10, 07 to Jan 14 , 07 - four days.

So, would we guess that the 10K would be handed out during one of these holydays? Obviously it would fit well with our RV being done before the end of the year....so this 10K would put some money in iraqis people hands to start a small business, build a house, whatever....

Originally Posted by Adster

Interesting, cannot get into this site now.....anyone else??? Any ideas what Aemarih means?! Am thinking something like 'very'.....

I pinged it...the server is up...the web server is down only...I couldn't get it either

Originally Posted by Jola

Two EIDs coming actually: Dec 31, 06 to Jan 3, 07 - four days
and Jan 10, 07 to Jan 14 , 07 - four days.

No, that Jan 10 EID was the previous one (Jan 2006). The next Eid al Adha is December 20, 2007

Quote Adster: Just changing the subject, nice to see Stef getting a hard time on IIF in the 'This is a first' thread, lol. Go have a read!!!! Sure Susie will enjoy it!!

Originally Posted by AlwaysDreaming

Quote Adster: Just changing the subject, nice to see Stef getting a hard time on IIF in the 'This is a first' thread, lol. Go have a read!!!! Sure Susie will enjoy it!!

Seems ol steph. didn't want to come out and play.....LMAO!

This statement that I highlighted is proof enough to me that we all made a very wise investment into the dinar!!!


Energy - Oil & Gas

Will the tap open? Why oil groups dream of the day they can enter Iraq
By Carola Hoyos and Roula Khalaf

--------------------------------------------------------------------------------

08 December 2006 (Financial Times)
American troops stood by as government offices in Baghdad were torched and looted after the city's fall in April 2003, a chaotic beginning to the flawed US-led campaign in Iraq. But one imposing concrete building was accorded special treatment.

Ringed with barbed wire, with dozens of US tanks guarding the entrance and American soldiers perched on roofs, the oil ministry emerged unscathed from the post-invasion mayhem. US officials insisted at the time that their objective was to safeguard the centre of Iraq's vital resources. The US military's actions, however, fed the conspiracy theory that the toppling of Saddam Hussein was itself designed to gain control of Iraqi oil.

Whatever the motives, the turmoil now sweeping the country has caught up with Iraq's oil industry. The sector has been devastated by violence, a lack of investment and rampant corruption. Production has not regained pre-invasion levels.

While the stability of Iraq under the former regime had been buttressed by oil revenues, today the struggle for control over these resources - the third largest petroleum reserves in the world, after Saudi Arabia and Iran - is threatening to tear the country apart. An uneven distribution of reserves has exacerbated discord among Iraq's three main communities - the majority Shia and minority Sunni Arabs and Kurds - over the political destiny of Iraq.

As it strains to contain the sectarian bloodshed and ease the departure of its own troops from Iraq, the US has been exerting pressure on Iraqi leaders to pass a hydrocarbons law that would more fairly regulate the distribution of oil revenues and close some of the sectarian rifts. Political squabbles have overshadowed what could be the historic aspect of the legislation: although the previous regime had moved towards opening up the sector, in order to encourage oil companies to break United Nations sanctions, the law is expected finally to reverse the 1972 nationalisation of the industry.

According to drafts now circulating, it would allow various forms of foreign partnership, possibly includingproduction-sharing agreements. Such contracts are preferred by oil companies, allowing them to hedge the risk of cost overruns and giving them greater scope for gain if oil prices rise.

While the passing of the legislation by the Iraqi parliament would provide a welcome legal framework for big international oil companies, executives acknowledge that investment is still far off. "The whole industry is interested in Iraq, including us," says a BP official. But, echoing concerns expressed by other companies, he adds: "The security situation would have to improve dramatically if oil companies like us were to commit themselves to long-term exploration and production."

While international oil companies are used to working in troubled environments, from rebel attacks in Nigeria to general strikes in Venezuela, the conflict in Iraq not only dwarfs anything they have had to deal with in recent history but has also been on a steady escalation, putting into question the very existence of the Iraqi state.

Unlike Algeria's civil war in the 1990s - where the survival of the state apparatus, backed by a powerful army, helped attract oil and gas investment - Iraq is run by a weak central government whose authority is challenged by local militias and political groups.

"To look into future [Iraqi oil] policy is to look into the unknown," argued Walid Khadduri, an expert on the country's resource sector, told a recent London conference. "You can't discuss future oil policy before knowing what will happen in the south of the country [home to most of Iraq's oil wealth], who will control the south, whether it'sone national party or even local Shiaparties."

According to the Iraq Study Group, the US bipartisan commission that this week recommended a radical change of course for America in Iraq, the country is producing only 2.2m barrels a day and exporting about 1.5m b/d. This is below the Iraqi government's target of 2.5m b/d and falls far short of the sector's vast potential.

Another recent report, by the oil ministry's general inspectorate, found that Iraq had lost more than $24.7bn (£12.6bn, €18.6bn) of potential oil revenues over the past three years because of political instability and violence, including the sabotage of pipelines.

From a global perspective, Iraq's oil is becoming increasingly important to overall supply as demand accelerates, from China in particular, and output from fields in the US, Europe and parts of Asia slows with their advancing age. According to the International Energy Agency, the developed countries' watchdog on the issue, Iraq would have to increase its oil production by 4.9 per cent each year until 2030 to meet the world's oil demand, which is expected to jump to 116m b/d from 85m b/d.

Big oil multinationals struggling to increase their own production and add to reserves have been desperate to be given a chance to develop Iraq's oilfields. The country has 115bn barrels of estimated reserves and only 22 out of 87 known fields are on stream. Large tracts of Iraq remain little explored,

Big oil companies have enjoyed record profits from their global operations in the past two to three years. But the groups are finding themselves increasingly squeezed out of promising projects that could bolster their proved reserves. The reserves figures on their balance sheets are seen as one of the main indicators of oil companies' future viability. But a trend towards resource nationalism has seen governments, such as in Venezuela and Russia, wresting control of important fields away from foreign operators. Saudi Arabia, Kuwait and Mexico, which own the world's three biggest individual oilfields, have kept their doors shut.

The big groups are therefore seeking to prepare for the day when they will be able to enter Iraq, trying to create closer relationships with Iraqi officials and to gain information about oilfields in ways that do not require visits to the country. BP and Royal Dutch Shell agreed to provide free assessments of the geological, technical and other data on Iraq's two main oilfields, Kirkuk in the north and Rumaila in the south. This has helped them catch up with competitors such as Total, which may have gained access to such data when they negotiated contracts with the Saddam regime. Others such as Chevron have forged relationships and gleaned information by organising training sessions for Iraqi engineers outside Iraq.

There has also been concerted lobbying, some of which came to light during Australia's ongoing official inquiry into kickbacks the Australian Wheat Board is alleged to have paid during the Saddam era. Documents published by the inquiry of meetings among diplomats, business executives and lobbyists show that companies such as BHP Billiton, the Anglo-Australian mining and oil group, actively lobbied the US and UK after the invasion in the hope of securing contracts for Iraqi oilfields.

Sir Malcolm Rifkind MP, a former Conservative minister, advised BHP and a Netherlands subsidiary that"it was critical to register the BHPBilliton/British Dutch/Tigris interest early with the US administration", according to minutes of a May 19 2003 meeting in London. At a separate meeting he attended that day, the Foreign Office was recorded as saying that "US administrators in Iraq were already rehabilitating existing oilfields". The US was "reported to have told the UK 'not to behave like the English' but rather tell the administration if it has particular interests", the minutes show. Sir Malcolm declined tocomment.

Yet it might be Russian, Chinese and Indian oil groups that stand to benefit first from Iraqi oil, given their apparently greater willingness to take on the security risk. Hussein Shahrastani, Iraq's oil minister, recently embarked on a tour of Asia, holding meetings with China's four biggest energy companies. He said concerns over security did not come up.

Leonid Fedun, vice-president of Russia's Lukoil, which is looking to renew the commitment it once secured from the Ba'athist regime to develop Iraq's giant West Qurna field, also suggests violence is no deterrent. "Unlike western companies, we are willing to work under any circumstances," he says. "It looks like Russians have a different definition of risk." He notes that Vagit Alekperov, Lukoil's president, has been to Baghdad several times in the past two years - a claim not one leader of a western oil company could match.

Analysts say that it is partly Lukoil's experience in Iraq that attracted the interest of ConocoPhillips, the third-largest US energy group. Conoco-Phillips paid nearly $2bn for the Russian government's 7.59 per cent Lukoil stake, which it has since boosted to 20 per cent even while Russia has become an increasingly treacherous location for international oil companies.

Some western oil executives say that if a legal framework for investment emerges, the west's energy companies might begin by investing in the relatively stable and underexplored Kurdish north. Groups such as Norway's DNO are drilling for oil in the Kurdish regions. Canada's K Petroleum and the UK's Sterling Energy have signed agreements for field studies.

But such contracts are part of the political controversy that has been holding up parliamentary approval of the hydrocarbons law. The Kurdish region has been asserting its right to develop new fields, based on the ambiguous wording of the Iraqi constitution adopted in October 2005.

The constitution says the central government should be allowed to control existing oilfields but remains vague on who should control newly developed ones. Kurdish officials argue that other parts of the constitution give regional governments all powers not explicitly granted to the federal government. The central government, led by a Shia coalition, says the issue has yet to be resolved. Mr Shahrastani has warned that Baghdad did not see itself as bound by contracts agreed between international companies and the Kurdistan authorities.

The politics of oil have also pitted the Sunni Arabs, concentrated in the oil-poorer centre of the country, against Shia parties that are dominant in the south, home to 60-70 per cent of Iraq's oil reserves. The Sunni voted against the constitution in a referendum last year partly because of a clause allowing the creation of federal regions, which the Sunni fear could lead to the break-up of the country and deprive them of a share of oil revenues.

Kurdish aspirations for control of the northern city of Kirkuk, whose surrounding fields account for nearly 10 per cent of total oil reserves, form another explosive issue that is also fiercely contested by Sunni Arabs.

Indeed, analysts warn that the lethal mix of sectarian politics and disputes over oil should make the most adventurous oil companies cautious. If violence continues to escalate, the risk of a gradual disintegration of the country into separate Shia, Kurdish and Sunni Arab parts will mount, rendering irrelevant any legal framework approved by parliament.

Raad al-Kadiri, director for the Middle East and North Africa at PFC Energy, a Washington-based industry consultancy, says that even if oil legislation is agreed and at least some of the political disputes over oil are settled, foreign investors might still not feel sufficiently protected.

"When we talk about legislation we talk about civilised politics in four square miles of Baghdad, which has less and less relevance to what happens outside," he says, referring to the heavily guarded Green Zone, home to government offices. "It's not clear what will happen in Iraq . . . and that pushes oil and gas investments way back."

Additional reporting by Steve Negus