Friday, January 26, 2007

Big Oil strikes (black) gold in Iraq. $3 billion worth.

Front paged at Booman Tribune and ePluribus Media

And there it is. Once again.

As if there wasn’t enough reason to make you disgusted about the trillions of our dollars and tens of thousands of lives (at a minimum) wasted in Iraq, ExxonMobil and Chevron are (quietly) negotiating with Iraq on a $3 Billion deal for one of them to build a petrochemical plant.

So while a debate continues to rage about whether we should send more troops (which are already being sent) or whether we should keep the same troop levels – as opposed to debating the best and most appropriate exit strategy, those “poor oil companies” are now looking to loot the Iraqi government in addition to the US government.

Iraq is in negotiations with Chevron Corp. and Exxon Mobil Corp. to build a new $3 billion petrochemical facility, and is in talks with several other Western companies over industrial projects.

In an interview Thursday, Iraq's minister for industry and minerals Fowzi Hariri said the discussions with Chevron and Exxon began this week in Washington and are at an early stage.

"It will be one or the other company for this new facility, not both," he said. "We're hoping to have a (Memorandum of Understanding) in place by about July."

Of course, it bears reminding just who has a Chevron oil tanker named after her, or which “retired CEO” was recently appointed to be a prominent “decider” of America’s future energy policies.

But this new deal, which so far the discussions are “preliminary”, arises from Iraq’s Foreign Investment Law (warning, .pdf) which was passed late last year. Some of the highlights of this law are below:

On October 10, Iraq adopted an investment law that offers an accommodating regulatory environment for U.S. business. The law will take effect once published in the Official Gazette. Although various actions must be taken before Iraq’s new investment regime is fully functional, there are several noteworthy features of the recently-approved law:

- All investors enjoy equal treatment under the law without regard to nationality (Art. 10);

- Iraqi workers receive priority in hiring, but investors may hire non-Iraqi workers if Iraqi workers do not have the necessary qualifications (Art. 12);

- Investors who obtain investment licenses from the National Commission on Investment are entitled to additional benefits. These benefits include:

- For investors in specific areas, an exemption from taxes and fees for a period of ten years from the date commercial operations begin (Article 15.1); and

- An exemption from fees, for a period of three years from the time an investment license is granted, for assets imported for the purposes of an investment project (Art. 17.1); and

- The law prescribes clear procedures for obtaining an investment license (Art. 19-20).

A pretty sweet deal, or at least the potential to be pretty sweet for the US firms. And there was concern early on that Iraqi businesses would suffer from this law:
The new investment law, expected to be issued in Iraq soon, has led to differences of opinion in economic and political quarters. It is feared that the law will interfere with the country's sovereignty and harm the private sector, which is unable to hold its own against foreign competitors.

The law will be discussed in the Iraqi parliament during the next two months, and is expected to be approved by the end of the year.

The new law includes allowing non-Iraqi investors to have 100 per cent ownership of companies, untaxed profit transfers and 40-year rent leases. The only area exempted is the natural resource sector, which includes oil and energy.


Rida Blaibel, President of the Iraqi Businessmen Association told Gulf News the private sector in Iraq will be seriously threatened if the law comes into effect.

Yes, I italicized the portion that exempts the oil and energy industry – I do so because Article 29 of the actual law only exempts investment in oil and gas extraction and production. Therefore, it would appear that this deal would be covered under the Law, since a basic explanation of what the “petrochemical” definition and end products are doesn’t cover oil and gas extraction and production (if I am mistaken here, please let me know and I will revise).

Of course, the fact that everyone is “on an even playing field” would seem to be good for companies that want to make the investment. However, in a situation where Iraqi unemployment is at the levels it is at, and the private sector is close to nonexistent, this could be a way to at least temporarily favor Iraqi businesses and help get the country back on the right foot – even to a small degree.

Of course, we remember the little provision in the Iraq Study Group report that pushed for the privatization of the oil industry. So, with the way that things have gone since Cheney’s secret energy commission included a map of the Iraqi oil fields and the proposed location of the “superbases” in Iraq – you don’t need to be a genius to see the many ways that the Big Oil companies are looking to get their meaty paws on that Iraqi money.

And while our troops continue to kill and die for lies and greed, the vultures are looking to raid the world’s coffers even further:

Dow Chemical's contract could be $40 million to $50 million, the minister added.


While in the United States, the minister also held talks with the U.S. Geological Survey about performing a nationwide survey of Iraq's potential mineral base.


Hariri plans to have discussions with General Electric Corp. over possible power turbine contracts and with General Motors Corp. over contracts for service vehicles, such as fire trucks and ambulances. The latter contract would be worth $80 million or less.

Over the next several years, the minister said Iraq would look to privatize all of state-owned industry, which number around 60 companies

Is there no end to their greed? Is there any question as to why the US is not trusted in any corner of the world? Is there any wonder why the US is being squeezed out of every other meaningful international alliance?

Is there any end to this embarrassment and nightmare?

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