Friday, December 28, 2007

Iraqi Unions Fight the New Oil Law

One of the Bush administration’s top political priorities is Iraq’s proposed oil law, which would open up control of the country’s oilfields to multinational corporations. On July 3, Bush called Iraqi Prime Minister Nuri al-Maliki to encourage him and other leaders to move forward on it. The latest draft of this new oil law headed to the Iraqi Parliament for debate. With strong opposition from Iraqi oil workers, enacting the law will be very difficult, even if does pass through the Parliament.

“It doesn’t serve the interests of the Iraqi people,” says Faleh Abood Umara, general secretary of the Basra-based Southern Oil Company Union and the Iraqi Federation of Oil Workers’ Unions. Umara recently toured the United States, advocating national control of Iraqi oil assets and the immediate withdrawal of US troops from Iraq.

Umara emphasizes the fact that the new law was written in the United States and would permit joint ownership of many Iraqi oil fields by foreign companies. Under the new law, Iraq could export much of the oil and profits from these fields for up to 35 years under what are called “production sharing agreements.”

“We want the national Iraqi oil company to make service contracts with the companies, not partnerships,” Umara said in an interview. Basically, the Iraqi oil workers’ unions are opposed to sharing joint ownership of the oil assets. “We want new technology for the production of oil but to have foreign companies work with Iraqi workers and professionals for a limited time only,” he says. “We are not opposed to being developed with advanced and imported technology, but we would like to be sole owner of our wealth and use it to develop our country and cities.” The oil workers’ opposition to the law could prove a serious obstacle to the already much-delayed legislation.

Umara says the oil workers’ unions want the distribution of revenue directed to a national redevelopment fund. But the Bush administration has long wanted to give foreign oil companies as much control as possible over Iraqi oil fields. The proposed oil law partly would govern the distribution of revenue. Antonia Juhasz, an analyst for the Oil Change International, says that the law gives foreign oil companies great flexibility, with no requirement to hire or invest profits locally, and opens the door to the long-term production-sharing agreements. Other Middle East oil-producing nations have rejected these agreements. The average oil worker is concerned about the future of Iraq’s oil.

US oil companies like Triple Diamond Energy Corporation see this objection to the new oil law proposal as a delay in foreign oil imports. They realize it is, more than ever before, necessary to find ways for the United States to be energy independent.

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