Iraq's oil reserves, the third largest in the world, with an estimated 115 billion barrels is waiting to be extracted by Western companies. The Iraqi government is being forced by the Bush administration to remove the oil industry from the hands of the local based oil company that was responsible for oil extraction and sale during Saddam Husein's era. Claims that the US wanted to capture Iraq to split its oil reserves among western – particularly US companies – will soon come true.

The Iraqi government is preparing to give the go ahead for the splitting of the oil industry in the country with western companies the like of Exxon Mobil. A new oil law will be voted soon and the US troop surge in the Iraq will also be used to protect oil extraction business in the country after they are done with the insurgency.

Baghdad is said to be ready to implement a new system under which it will allow companies like BP and Shell in Britain, and Exxon and Chevron in the US to sign deals of up to 30 years to extract Iraq's oil. The system is known as "production-sharing agreements", or PSAs,

PSAs allow a country to retain legal ownership of its oil, but gives a share of profits to the international companies that invest in infrastructure and operation of the wells, pipelines and refineries. Their introduction would be a first for a major Middle Eastern oil producer, wrote the Independent Newspaper from London in December last year.

The Iraqi government of Nouri Al Maliki has since then confirmed the dispositions to share the oil reserves of Iraq with the companies mentioned above.

Most of the Arab world tightly control their oil industries through state-owned companies. There are no large scale foreign collaboration and this is also the case with the Organization of Petroleum Exporting Countries or Opec.

Iraq's deputy prime minister, Barham Salih, have announced that the draft oil law is ready to be presented to the cabinet for approval.

The draft law is designed to hand most of the oil resources to foreign corporations under long-term exploration- and production-sharing agreements which may range from 10 to 30 years said news reports.

Iraq's oil has been the main issue that led to the Iran-Iraq war under the political propaganda of the US. In 1972, Iraq nationalized its oil industry, pushing international oil companies out of the country and keeping a tight control on the oil business until the American invasion of the country in 2003.

Since the invasion, Iraqi oil production has dropped off dramatically, falling to about two million barrels a day. Most of this oil is sold illegally to Western companies by Kurdish and Shiite factions, including the deputy Prime Minister's Kurdish movement. The people of Kurdistan it is said, is not benefiting from these deals.

The government has little control of the oil extraction since 2003, the oil being controlled by American contractors who were sent there to make sure they have an eagles eye on the oil reserves. American soldiers entering Iraq in 2003 were given specific orders to secure oil fields as part of their primary target.

Before the 2003 war, Iraq was producing 3.5 million barrels per day, most of this extraction were paying for the oil for food program under the United Nations.

Nowadays, a large section of the existing oil pipelines are damaged and those repaired are under constant attack by insurgents who are fighting the US in Iraq.

The Independent Newspaper estimate that despite the size of Iraq's reserves - the third largest in the world - only 2,300 wells have been drilled in total, fewer than in the North Sea. This leaves a larger number of wells to be drilled. They are easy to be located and are also cheaper for drilling than in other Arab states.

The Americans estimate they will be able to push Iraq to increase production to 6 million barrels a day by 2015. Washington is launching an all out war against Iraqi citizens who are against US occupation of their country in a bid to improve the security situation in Iraq. This will help western companies scoop up to $25bn in the next five years.

Comments (0)

Subscribe to this comment's feed

Show/Hide comments

Name

Email

Website

Title

Comment

Write the displayed characters

Add Comment