Iraq’s oil industry is in a parlous state as a result of sanctions, wars and occupation. The government, through the ministry of oil’s inspector general, has issued damning reports of large-scale corruption and theft across the oil sector. Many competent senior technical officials have been sacked or demoted, and the state oil-marketing organisation has had several directors. Ministries and public organisations are increasingly operating as party fiefdoms, and private, sectarian and ethnic perspectives prevail over the national outlook. This state of affairs has negative results for all except those who are corrupt and unscrupulous, and the voracious foreign oil corporations. The official version of the draft law has not been published, but there is no doubt that it will be designed to hand most of the oil resources to foreign corporations under long-term exploration- and production-sharing agreements.
The oil law is likely to open the door to these corporations at a time when Iraq’s capacity to regulate and control their activities will be highly circumscribed. It would therefore place the responsibility for protecting the country’s vital national interest on the shoulders of a few vulnerable technocrats in an environment where blood and oil flow together in abundance. Common sense, fairness and Iraq’s national interest dictate that this draft law must not be allowed to pass during these abnormal times, and that long-term contracts of 10, 15 or 20 years must not be signed before peace and stability return, and before Iraqis can ensure that their interests are protected.
This law has been discussed behind closed doors for much of the past year. Secret drafts have been viewed and commented on by the US government, but have not been released to the Iraqi public – and not even to all members of parliament. If the law is pushed through in these circumstances, the political process will be further discredited even further. Talk of a moderate cross-sectarian front appears designed to ease the passage of the law and the sellout to oil corporations.
The US, the IMF and their allies are using fear to pursue their agenda of privatising and selling off Iraq’s oil resources. The effect of this law will be to marginalise Iraq’s oil industry and undermine the nationalisation measures undertaken between 1972 and 1975. It is designed as a reversal of Law Number 80 of December 1961 that recovered most of Iraq’s oil from a foreign cartel. Iraq paid dearly for that courageous move: the then prime minister, General Qasim, was murdered 13 months later in a Ba’athist-led coup that was supported by many of those who are part of the current ruling alliance – the US included. Nevertheless, the national oil policy was not reversed then, and its reversal under US occupation will never be accepted by Iraqis.
· Kamil Mahdi is an Iraqi academic and senior lecturer in Middle East economics at the University of Exeter