Iraqi Oil Law?

A bunch of evening clicking around led to me to what purports to be an unofficial English translation of the latest draft text of a proposed Iraqi Oil Law. Apparently, this draft text has been a closely held secret.

According to this blog, if passed this draft would have some serious distributional consequences:

Please feel free to widely distribute this document. It's important to start a stronger debate and to try to educate Iraqis and Americans about this catastrophic law that will facilitate the further looting of Iraqi oil, and will achieve nothing other than increasing the levels of violence and anger in Iraq.

This law legalizes PSAs (production sharing agreements) in Iraq. Iraq will be the only country in the middle east with such contracts privatising Iraqi oil and giving foreign companies crazy rates of profit that may reach to more than three fourth of the general revenue. Iraq and Iraqis need every Dinar that comes from oil sales. In addition to the financial aspects of this law, it can be considered the funding tool for splitting Iraq into three states. It undermines the central government and distributes oil revenues directly to the three regions, which sets the foundations for what Iraq's enemies are trying to achieve in terms of establishing three independent states.

Unfortunately, I can't vouch for the authenticity of the translation or the commentator as they are all complete strangers to me.

Nor am I so sure that dividing Iraq yet sharing oil revenue is necessarily such a terrible outcome, at least compared to the other imaginable outcomes. As for PSAs, I'd think the devil is in the details — Iraq is presumably short of capital for exploration and development (the capital having been destroyed, denuded. and of course stolen) so unlike its neighbors it may need these deals — if somehow they were concluded in an equitable fashion…which I admit is not all that likely in the current circumstances where the government has such a weak hand to play.

By raising these questions I don't want to sound like I'm claiming the blog quoted above is wrong. I simply don't have enough information to form a judgment either way. And, for what it's worth, the same bout of clicking did bring to me to Digby's quotation of this line by conservative she-guru Ann Coulter, “Liberals are always talking about why we shouldn't go to war for oil. But why not go to war for oil? We need oil.”

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2 Responses to Iraqi Oil Law?

  1. Mojo says:

    I’m convinced that the best we could hope for in Iraq at this point would be partition but with oil managed centrally and with the bulk of the funds being distributed directly to the regions. But, as you point out, the devil’s in the details and I’m not really optimistic.

  2. hipparchia says:

    I’m not an expert on any facet of the oil business, and most of what I know about PSAs I’ve gleaned from web [now there’s a reliable source!], but the parallel from our cozy modern American lives that comes to mind is payday loans, instant tax refunds, and other predatory lending practices of various stripes. PSAs are one form of oil contract, and they’re legal, but compared to other oil contracts commonly in use in the Middle East for decades now, PSAs look predatory, to my untutored eyes. Apparently, some upstart Iraqis think so too, and they’re pissed about this as well as our invasion and occupation of their country. They should be.

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