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Executive Summary
While the Iraqi people struggle to define their future amid political chaos and violence, the fate of their most valuable economic asset, oil, is being decided behind closed doors.
This report reveals how an oil policy with origins in the US State Department is on course to be adopted in Iraq, soon after the December elections, with no public debate and at enormous potential cost. The policy allocates the majority (1) of Iraq’s oilfields – accounting for at least 64% of the country’s oil reserves – for development by multinational oil companies.
Iraqi public opinion is strongly opposed to handing control over oil development to foreign companies. But with the active involvement of the US and British governments a group of powerful Iraqi politicians and technocrats is pushing for a system of long term contracts with foreign oil companies which will be beyond the reach of Iraqi courts, public scrutiny or democratic control.
COSTING IRAQ BILLIONS
Economic projections published here for the first time show that the model of oil development that is being proposed will cost Iraq hundreds of billions of dollars in lost revenue, while providing foreign companies with enormous profits.
Some snippets --
* At an oil price of $40 per barrel, Iraq stands to lose between $74 billion and $194 billion over the lifetime of the contracts - and this is from only the first 12 oilfields to be developed. 200% to 700% of the current Iraqi Budget
* Under the terms of the contracts, oil company rates of return from investing in Iraq would range from 42% to 162%. "Platform" estimates that this is far in excess of usual industry minimum target of around 12% return on investment.
Right from the pages of the Project for a Mew American Century's and the Office of Vice President Cheney, as reported in DU and the pages of the Washington Post |
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