[Vision2020] Global Policy Forum: Oil In Iraq

[Ted Moffett]

All:

They appear to have their facts wrong about "proven oil reserves" in Iraq
being second in the world, given Canada now has the recognized second
largest oil reserves in the world by the oil industry.  But if Iraq's proven
reserves turn out to be 200+ billion barrels, this would surpass Canada's
current recognized total of proven reserves.  But Canada's oil sands are
more expensive to extract and process into oil, thus per barrel Iraq oil is
cheaper to produce.  What is interesting at this web site is the
documentation of the moves to control Iraq's oil, now and in the past, by
various interests that it is doubtful have Iraqi democracy foremost in mind
as the primary decider of the fate of Iraqi oil:

http://www.globalpolicy.org/security/oil/irqindx.htm

Iraq has the world's second largest proven oil reserves. According to oil
industry experts, new exploration will probably raise Iraq's reserves to
200+ billion barrels of high-grade crude, extraordinarily cheap to produce.
The four giant firms located in the US and the UK have been keen to get back
into Iraq, from which they were excluded with the nationalization of 1972.
During the final years of the Saddam era, they envied companies from France,
Russia, China, and elsewhere, who had obtained major contracts. But UN
sanctions (kept in place by the US and the UK) kept those contracts
inoperable. Since the invasion and occupation of Iraq in 2003, much has
changed. In the new setting, with Washington running the show, "friendly"
companies expect to gain most of the lucrative oil deals that will be worth
hundreds of billions of dollars in profits in the coming decades. The Iraqi
constitution of 2005, greatly influenced by US advisors, contains language
that guarantees a major role for foreign companies. Negotiators hope soon to
complete deals on Production Sharing Agreements that will give the companies
control over dozens of fields, including the fabled super-giant Majnoon. But
first the Parliament must pass a new oil sector investment law allowing
foreign companies to assume a major role in the country. The US has
threatened to withhold funding as well as financial and military support if
the law does not soon pass. Although the Iraqi cabinet endorsed the draft
law in July 2007, Parliament has balked at the legislation. Most Iraqis
favor continued control by a national company and the powerful oil workers
union strongly opposes de-nationalization. Iraq's political future is very
much in flux, but oil remains the central feature of the political
landscape.
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Vision2020 Post: Ted Moffett
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