Iraq's 28,000 oil workers are due to stop work on May 14 to protest against a draft oil law that would pave the way for Iraq's nationalised oil industry to be taken over by US and British oil corporations.
"The central government must be in total ownership and complete control of production and the export of oil", Imad Abdul-Hussain, deputy chairperson of the Iraq Federation of Oil Unions (IFOU), whose member unions cover 26,000 oil workers, said in a May 8 statement announcing the decision to stage the one-day strike.
"The [draft] oil law does not represent the aspirations of the Iraqi people", Hassan Juma Awad, the IFOU's president, told United Press International in March.
The Iraqi oil unions "have successfully fought privatisation and salary decreases over the past three years, including blocking foreign companies from entry into facilities and holding up exports", UPI noted on May 8.
In 2003 and 2004, the IFOU forced the withdrawal of contracts favourable to international oil companies (IOCs). According to a May 6 Tomdispatch.com article by Michael Schwartz, professor of sociology at New York's Stony Brook University, in January 2006, the IFOU convened a conference composed of representatives of all major Iraqi union groups in Amman, Jordan. The conference issued a manifesto opposing Washington's entire neoliberal "free market" program for Iraq, including any compromise on Iraqi state control of oil production.
Iraq possesses proven oil reserves of some 115 billion barrels — the world's third largest. In addition its reserves have an extremely low per-barrel cost to exploit. Iraq's unproven reserves could be hundreds of billions barrels more.
Schwartz noted that in 1999, Dick Cheney — since 2001 US vice-president but then CEO of the Halliburton oil services company — told the London-based Institute of Petroleum Engineers that, when it came to making profits out of the oil business, "the Middle East, with two-thirds of the world's oil and the lowest cost, is still where the prize ultimately lies". He complained that too much of the Middle East's oil resources were in local governments' hands, rather than those of IOCs.
Somewhat ironically, Cheney also claimed: "Oil is the only large industry whose leverage has not been all that effective in the political arena." Within weeks of his January 2001 inauguration, US President George Bush appointed Cheney to head up a secretive energy task force known as the National Energy Policy Development Group.
According to Schwartz, in February 2004 the New Yorker magazine reported that it had obtained a previously undisclosed February 3, 2001, National Security Council document that had directed NSC staff to cooperate fully with Cheney's energy task force "as it considered the 'melding' of two seemingly unrelated areas of policy: 'the review of operational policies towards rogue states', such as Iraq, and 'actions regarding the capture of new and existing oil and gas fields'."
The November 15, 2005, Washington Post reported that it had obtained documents detailing how executives from major US oil corporations, including ExxonMobil and Conoco, as well as the US subsidiaries of Shell and BP, met with the Cheney task force members while they were developing policy recommendations, something these executives had previously denied in congressional testimony.
Cheney's energy task force recommended the Bush administration launch a drive to get Middle Eastern countries "to open up areas of their energy sectors to foreign investment".
Schwartz writes, "In 2002, just a year after Cheney's Task Force completed its work, and before the U.S. had officially decided to invade Iraq, the State Department 'established a working group on oil and energy,' as part of its 'Future of Iraq' project. It brought together influential Iraqi exiles, U.S. government officials, and international consultants." After the US-British-Australian 2003 invasion, several Iraqi members of the group became leading figures in Washington's puppet Iraqi government.
The project group concluded that production sharing agreements (PSAs) — a method that grants the big Western oil companies effective control of Third World oilfields without transferring permanent ownership to them — would be the basic instrument through which a "liberated" Iraq would develop its oilfields.
The result of the project's work was a "draft framework for Iraq's oil policy" that formed the foundation for the draft oil law now working its way through Iraq's parliamentary process.
An earlier draft of the law, in English, was leaked in mid-2006, shocking a number of specialists. Among them was Erik Leaver of the Washington-based Institute for Policy Studies, who spotted language in the draft matching exactly that of a previously leaked seminar paper produced by a US private contracting company, BearingPoint.
In an October 17 AlterNet article, Joshua Holland, a research fellow with the Los Angeles-based Center for Active Learning in International Studies, described BearingPoint's role. He noted that in February 2006 — only months after Iraq's December 2005 parliamentary elections — the US Agency for International Development "sent a BearingPoint adviser to provide the Iraqi oil ministry 'legal and regulatory advice in drafting the framework of petroleum and other energy-related legislation, including foreign investment' …
"The Iraqi parliament had not yet seen a draft of the oil law as of July [2006], but by that time … it had already been reviewed and commented on by US energy secretary Sam Bodman, who also 'arranged for [Iraqi oil minister] Dr [Hussain] al Shahristani to meet with nine major oil companies — including Shell, BP, ExxonMobil, ChevronTexaco and ConocoPhillips — for them to comment on the draft.'"
By the time the draft oil law was delivered to the Iraqi parliament in February 18 this year, its key provisions had already been denounced by Iraqi unions, the leadership of the major Sunni political parties, the parliamentary representatives of the movement led by anti-occupation Shiite cleric Moqtada al Sadr, as well as public spokespersons for anti-occupation Iraqi guerrilla fighters, Schwartz noted.
Although some of the provisions in the earlier draft were changed, including the removal of all explicit mention of either privatisation or PSAs, the new draft still allows for both. It allows IOCs to "repatriate all profits from oil sales almost insuring that the proceeds would not be reinvested in the Iraqi economy", according to Schwartz.
Furthermore, the Iraqi government would not have control over IOC operations inside Iraq, and any disputes would be referred instead to pro-IOC international arbitration panels. Contracts entered into between the Iraqi government and IOCs would not be public documents, and contracting IOCs would not be required to hire any Iraqi technicians or production workers.
The May 10 oil workers' strike came a day after an unannounced visit by Cheney to Baghdad to pressure Iraqi Prime Minister Nuri al Maliki for quick action on key legislation before the Iraqi parliament.
Reuters reported that "Cheney's visit, part of a Middle East tour, signalled growing US impatience at Iraq's slowness in passing laws on oil distribution and other key measures as US military commanders build up troops to secure Baghdad …
"An explosion, apparently caused by a mortar bomb, rattled windows at the building in Baghdad's fortified Green Zone where Cheney and reporters travelling with him were working … Mortar attacks on the Green Zone are frequent …
"During a visit to Baghdad last month, US defence secretary Robert Gates said progress on a package of laws that include a bill dividing up Iraq's oil wealth would figure in Washington's decision to maintain higher troop levels …
"Cheney's visit to Iraq comes at a sensitive time. Leaders from the Sunni Arab minority have threatened to quit Maliki's government [over the proposed oil law] … Ethnic Kurds, staunch US allies, have also threatened to block the oil bill in parliament."