In August 2004, the U.S.-appointed interim Prime Minster of Iraq, Ayad Allawi (a former CIA operative), submitted guidelines for a new petroleum law recommending that the "Iraqi government disengage from running the oil sector" and that all undeveloped oil and gas fields in Iraq be turned over to private international oil companies using PSAs. Allawi's proposal is the basis of the current proposed oil law and could potentially give foreign companies control over approximately 87 percent of Iraq's oil.
The Bush administration and U.S. oil companies have maintained constant pressure on Iraq to pass the new law. The administration appointed an advisor to the Iraqi government from Bearing Point Inc., a Virginia-based private consultancy firm, to support completion of the law. This past July, U.S. Energy Secretary Bodman announced in Baghdad that senior U.S. oil company executives told him they would not enter Iraq without passage of the new law."
www.gregpalast.com/are-us-corporations-going-to-%E2%80%9Cwin%E2%80%9D-the-iraq-war/
From Globalpolicy.org:
If the proposed oil law passes, then whoever is contracted to extract the oil gets to keep whatever they can pull out of the ground, 100% of it. Their only costs would be the 12.5% royalty they have to pay to the Iraqi government, plus the operational costs of taking the oil out of the ground -- which costs are among the lowest in the world due to the fact that the oil in Iraq is so close to the surface. As the oil is removed, a count is kept of how many barrels are being taken, and a royalty must be paid to the Iraqi Oil Ministry that equals 12.5% of the value of the oil that's taken.
It should be noted that 12.5% is a notoriously small cut for the Iraqis. Other countries with plenty of oil get to keep anywhere between 50% and 90% of monetary value of the oil that is pumped by foreign oil companies. But a measly 12.5% share is the deal that BushCo is quietly trying to push down the throats of the Iraqis.
No wonder the insurgency is trying to drive the US Army out of their country!
http://www.globalpolicy.org/security/oil/2005/crudedesigns.htm
Documented evidence that Libya takes a full 92% of the profits from the oil pumped in its country by foreign oil companies: http://www.globalpolicy.org/security/oil/2005/crudedesigns.htm#ripoff
Here follows a synopsis of an article by Antonia Juhasz, an analyst with Oil Change International, a watchdog group. Antonia is the author of The Bush Agenda: Invading the World, One Economy at a Time.
"The oil law would transform Iraq's oil industry from a nationalized model closed to American oil companies (except for limited, although highly lucrative, marketing contracts) into a commercial industry, all-but-privatized, that is fully open to all international oil companies.
The Iraq National Oil Company (INOC) would have exclusive control of just 17 of Iraq's 80 known oil fields, leaving two-thirds of known -- and all of its as yet undiscovered -- fields open to foreign control.
The foreign companies would not have to invest their earnings in the Iraqi economy, partner with Iraqi companies, hire Iraqi workers, or share new technologies. They could even ride out Iraq's current "instability" by signing contracts now, while the Iraqi government is at its weakest, and then wait at least two years before even setting foot in the country. The vast majority of Iraq's oil would then be left underground for at least two years rather than being used for the country's economic development.
The international oil companies could also be offered some of the most corporate-friendly contracts in the world, including what are called production sharing agreements. These agreements are the oil industry's preferred model, but are roundly rejected by all the top oil producing countries in the Middle East because they grant long- term contracts (20 to 35 years in the case of Iraq's draft law) and greater control, ownership and profits to the companies than other models. In fact, they are used for only approximately 12 percent of the world's oil.
Iraq's neighbors Iran, Kuwait and Saudi Arabia maintain nationalized oil systems and 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."
