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<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>Page 3’s article: Iraqi PM fears <st1:country-region w:st="on"><st1:place
w:st="on">U.S.</st1:place></st1:country-region> will bring down government if
oil benchmark isn’t met, by Steven R. Hurst and Qassim Abdul-Zahra,
Associated Press<a name=secondParagraph></a><o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>From the NYT:<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>TODAY
more than three-quarters of the world’s oil is owned and controlled by
governments. It wasn’t always this way. <o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Until
about 35 years ago, the world’s oil was largely in the hands of seven
corporations based in the <st1:country-region w:st="on">United States</st1:country-region>
and <st1:place w:st="on">Europe</st1:place>. Those seven have since merged into
four: ExxonMobil, Chevron, Shell and BP. They are among the world’s
largest and most powerful financial empires. But ever since they lost their
exclusive control of the oil to the governments, the companies have been trying
to get it back.<o:p></o:p></span></font></p>
<p><st1:country-region w:st="on"><st1:place w:st="on"><font size=3
face="Times New Roman"><span style='font-size:12.0pt'>Iraq</span></font></st1:place></st1:country-region>’s
oil reserves — thought to be the second largest in the world — have
always been high on the corporate wish list. In 1998, Kenneth Derr, then chief
executive of Chevron, told a <st1:City w:st="on">San Francisco</st1:City>
audience, “<st1:country-region w:st="on"><st1:place w:st="on">Iraq</st1:place></st1:country-region>
possesses huge reserves of oil and gas — reserves I’d love Chevron
to have access to.”<o:p></o:p></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>A new oil
law set to go before the Iraqi Parliament this month would, if passed, go a
long way toward helping the oil companies achieve their goal. The <st1:country-region
w:st="on">Iraq</st1:country-region> hydrocarbon law would take the majority of <st1:country-region
w:st="on"><st1:place w:st="on">Iraq</st1:place></st1:country-region>’s
oil out of the exclusive hands of the Iraqi government and open it to
international oil companies for a generation or more.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>In March
2001, the National Energy Policy Development Group (better known as Vice
President Dick Cheney’s energy task force), which included executives of
America’s largest energy companies, recommended that the United States
government support initiatives by Middle Eastern countries “to open up
areas of their energy sectors to foreign investment.” One invasion and a
great deal of political engineering by the Bush administration later, this is
exactly what the proposed <st1:country-region w:st="on"><st1:place w:st="on">Iraq</st1:place></st1:country-region>
oil law would achieve. It does so to the benefit of the companies, but to the
great detriment of <st1:country-region w:st="on"><st1:place w:st="on">Iraq</st1:place></st1:country-region>’s
economy, democracy and sovereignty.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Since the
invasion of <st1:country-region w:st="on"><st1:place w:st="on">Iraq</st1:place></st1:country-region>,
the Bush administration has been aggressive in shepherding the oil law toward
passage. It is one of the president’s benchmarks for the government of
Prime Minister Nuri Kamal al-Maliki, a fact that Mr. Bush, Secretary of State
Condoleezza Rice, Gen. William Casey, Ambassador Zalmay Khalilzad and other
administration officials are publicly emphasizing with increasing urgency.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>The
administration has highlighted the law’s revenue sharing plan, under
which the central government would distribute oil revenues throughout the
nation on a per capita basis. But the benefits of this excellent proposal are
radically undercut by the law’s many other provisions — these allow
much (if not most) of <st1:country-region w:st="on"><st1:place w:st="on">Iraq</st1:place></st1:country-region>’s
oil revenues to flow out of the country and into the pockets of international
oil companies. <o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>The 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. <o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>The Iraq
National Oil Company 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. <o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>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 <st1:country-region w:st="on"><st1:place w:st="on">Iraq</st1:place></st1:country-region>’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 <st1:country-region w:st="on"><st1:place
w:st="on">Iraq</st1:place></st1:country-region>’s oil would then be left
underground for at least two years rather than being used for the
country’s economic development.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>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 <st1:country-region w:st="on"><st1:place w:st="on">Iraq</st1:place></st1:country-region>’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.<o:p></o:p></span></font></p>
<p><st1:country-region w:st="on"><font size=3 face="Times New Roman"><span
style='font-size:12.0pt'>Iraq</span></font></st1:country-region>’s
neighbors <st1:country-region w:st="on">Iran</st1:country-region>, <st1:country-region
w:st="on">Kuwait</st1:country-region> and <st1:country-region w:st="on"><st1:place
w:st="on">Saudi Arabia</st1:place></st1:country-region> 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. <o:p></o:p></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Iraqis
may very well choose to use the expertise and experience of international oil
companies. They are most likely to do so in a manner that best serves their own
needs if they are freed from the tremendous external pressure being exercised
by the Bush administration, the oil corporations — and the presence of
140,000 members of the American military.<o:p></o:p></span></font></p>
<p><st1:country-region w:st="on"><st1:place w:st="on"><font size=3
face="Times New Roman"><span style='font-size:12.0pt'>Iraq</span></font></st1:place></st1:country-region>’s
five trade union federations, representing hundreds of thousands of workers,
released a statement opposing the law and rejecting “the handing of
control over oil to foreign companies, which would undermine the sovereignty of
the state and the dignity of the Iraqi people.” They ask for more time,
less pressure and a chance at the democracy they have been promised.<o:p></o:p></p>
<p id=authorId><font size=3 face="Times New Roman"><span style='font-size:12.0pt'><nyt_author_id></nyt_author_id>Antonia
Juhasz, an analyst with Oil Change International, a watchdog group, is the
author of “The Bush Agenda: Invading the World, One Economy at a Time.”
<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
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