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Green Left Weekly "We need to change the way we run the oil sector in Iraq. We need to engage with the major oil companies who will bring in investment as well as technology", Barham Saleh, deputy PM in Washington's puppet Iraqi government, told journalists on the sidelines of a September 10 US-led International Compact for Iraq conference in the United Arab Emirates. Associated Press reported "Saleh said Iraqi leaders were nearing agreement on a long-awaited hydrocarbon law that would allow potentially huge investments by foreign companies in Iraq's oil sector", which was nationalised in 1972 and is currently administered by the oil ministry and two state-owned oil companies. "The absence of a legal framework governing investments and ownership of the country's oil resources has hampered foreign investment in the sector", AP added. In March 2005 BBC TV's Newsnight program reported that US President George Bush's administration "made plans for war and for Iraq's oil before the 9/11 attacks". Newsnight reported that "insiders" said the administration's planning for a war on Iraq and sell-off of its huge oil resources had begun "within weeks" of Bush taking office in 2001 — a year before the 9/11 attacks on the World Trade Center. Newsnight reported that the Bush administration's plan to rapidly sell off Iraq's oil industry "was given the green light in a secret meeting in London headed by Fadhil Chalabi shortly after the US entered Baghdad, according to Robert Ebel", a former US Energy Department official and CIA oil analyst. Fadhil Chalabi was an official in the Iraqi oil ministry in the 1970s and is a cousin of convicted bank embezzler Ahmad Chalabi, head of Pentagon-backed Iraqi National Congress exile group. The INC provided much of the fabricated "intelligence" on Iraq's non-existent arsenal of "weapons of mass destruction" that was used by Washington as the pretext to invade Iraq in March 2003. "Philip Carroll, the former CEO of Shell Oil USA who took control of Iraq's oil production for the US government a month after the invasion, stalled the sell-off scheme", Newsnight reported. "New plans, obtained from the State Department by Newsnight and Harper's Magazine under the US Freedom of Information Act, called for creation of a state-owned oil company favoured by the US oil industry. It was completed in January 2004 under the guidance of Amy Jaffe of the James Baker Institute in Texas. Formerly US Secretary of State, Baker is now an attorney representing Exxon-Mobil and the Saudi Arabian government." The US and British oil companies wanted a Saudi-style arrangement whereby Iraq's oilfields would remain nationalised but the international oil companies (IOCs) would take over their management through "production sharing agreements" (PSAs). On September 10, AP reported that Saleh told journalists he favoured PSAs as the form of IOC investment in Iraq's oil industry. Saleh said the national policy council negotiating the new hydrocarbon law would present a draft to parliament by year's end and predicted it would be voted into law before the end of the year. Iraq's proven oil reserves stand at about 115 billion barrels, the world's third-largest after Saudi Arabia's and Iran's. Writing in the June 5 Middle East Economic Survey, Tariq Shafiq, founding executive director of the state-owned Iraq National Oil Company (set up in 1964), pointed out that the oilfield development cost per barrel in Iraq is around US$1. The comparable cost in the North Sea, for example, is around $8. He argued that PSAs would place Iraq's oil industry under the control of the IOCs. "This would take Iraq back to the concessionary era with all its drawbacks, including serious infringement of Iraq's sovereignty" and "its near total financial dependence then on IOCs". From Green Left Weekly, September 27, 2006.
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