News Release

Iraqi Oil Law Impasse: Good News for Democracy?


Iraqis oppose plans to open the country’s oilfields to foreign investment by a ratio of two to one, according to a poll released yesterday.

Juhasz is the author of The Bush Agenda: Invading the World, One Economy at a Time and a fellow with Oil Change International. She said today: “For the first time, individual Iraqis have been asked to give their opinion of the transformation of their oil industry driven largely by the Bush administration. Their response is revelatory: Iraqis strongly oppose privatization and feel completely uninformed about the oil laws [legislation] set by the U.S. Congress as benchmarks for the Iraqi government even though they are virtually unknown to the Iraqi people.”
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Leaver is a research fellow at the Institute for Policy Studies. He said today: “Violating the very notions of freedom and democracy Bush invokes in nearly every speech on Iraq, the U.S. government has actively intervened in the restructuring of Iraq’s oil industry since at least 2002. This poll shows that Iraqis want the U.S. and private oil companies to stop pushing the Iraqi government to accept widespread privatization of Iraq’s oil development.”

Zahller is a campaign associate with Oil Change International. She said today: “While critics suspect the U.S.’s real motivation is the contracts for American and international companies, U.S. officials have stated that they see the law as a reconciliation measure, designed to unite Iraq’s ethnic and sectarian groups in a common vision of how to develop their oil. Ironically, the law has indeed united Iraqis — in opposition to the privatization proposals.”

Zahller added: “The Bush administration and Congress need to recognize that virtually all sectors of Iraqi society are opposed to the proposed oil law, and immediately cease pressure on the Iraqi government to pass it. Passage of the current draft law will only serve to fuel strong suspicions that access to and control of Iraqi oil was the reason for the war and the occupation.”
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According to a press release by Oil Change International: “At the center of the oil law is a proposal to give multinational oil companies such as ChevronTexaco, ExxonMobil, and ConocoPhillips the primary role in developing Iraq’s oilfields, under contracts of up to 30 years. Iraqis oppose these plans by a factor of two to one. Iraqis are united in this view: there are no ethnic, sectarian or geographical groups that prefer foreign companies. The poll also finds that most Iraqis feel kept in the dark about the oil plans — with fewer than a quarter feeling adequately informed about a proposed new law to govern Iraq’s oil sector. The poll was carried out in June and July by KA Research, and coordinated and analyzed by Custom Strategic Research. It was based on face-to-face interviews with 2,200 Iraqis in all 18 provinces.”

Also, on July 31, UPI reported: “Iraq’s Oil Ministry has directed all its agencies and departments not to deal with the country’s oil unions. … The unions went on strike in early June and are threatening to stop production and exports again if demands are not met. The unions claim the oil law, if approved by parliament, will give foreign oil companies too much access to the oil. The unions enjoy enormous support, especially in the south of Iraq.”

Jonathan Steele wrote last week in the Guardian: “Glad tidings from Baghdad at last. The Iraqi parliament has gone into summer recess without passing the oil law that Washington was pressing it to adopt. … Civil society, trade unions, professional oil experts and the media are stirring on the oil issue and putting their points across to parliament in the way democracy is meant to work. The oil unions have held strikes even at the risk of having leaders and members arrested.”

Steele added: “Washington has promoted the law as a ‘reconciliation’ issue, claiming its early passage would show that Iraq’s ethnic and sectarian communities could share revenues on a fair basis. But this is a trick. Only one of the law’s 43 articles mentions revenue-sharing, and then just to say that a separate ‘federal revenue law’ will decide its distribution. … Independent analysts say the terms being proposed are far more favorable for foreign oil companies than those of any other oil-producing state in the region, including Kuwait and Saudi Arabia. Platform, an oil industry watchdog, warns that the Iraq oil and gas law could ‘sign away Iraq’s future.’ Greg Muttitt, its co-director, says: ‘The law is permissive. All of Iraq’s unexploited and as yet unknown reserves, which could amount to between 100bn and 200bn barrels, would go to foreign companies.'”

For more information, contact the Institute for Public Accuracy at (202) 347-0020; or David Zupan at (541) 484-9167.