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seth106

10/18/06 "AlterNet" -- -- Iraq is sitting on a mother lode of some of the lightest, sweetest, most profitable crude oil on earth, and the rules that will determine who will control it and on what terms are about to be set.The Iraqi government faces a December deadline, imposed by the world's wealthiest countries, to complete its final oil law. Industry analysts expect that the result will be a radical departure from the laws governing the country's oil-rich neighbors, giving foreign multinationals a much higher rate of return than with other major oil producers and locking in their control over what George Bush called Iraq's "patrimony" for decades, regardless of what kind of policies future elected governments might want to pursue.
Iraq's energy reserves are an incredibly rich prize. According to the U.S. Department of Energy, "Iraq contains 112 billion barrels of proven oil reserves, the second largest in the world (behind Saudi Arabia), along with roughly 220 billion barrels of probable and possible resources. Iraq's true potential may be far greater than this, however, as the country is relatively unexplored due to years of war and sanctions." For perspective, the Saudis have 260 billion barrels of proven reserves.
Iraqi oil is close to the surface and easy to extract, making it all the more profitable. James Paul, executive director of the Global Policy Forum, points out that oil companies "can produce a barrel of Iraqi oil for less than $1.50 and possibly as little as $1, including all exploration, oilfield development and production costs." Contrast that with other areas where oil is considered cheap to produce at $5 per barrel or the North Sea, where production costs are $12-16 per barrel.
And Iraq's oil sector is largely undeveloped. Former Iraqi Oil Minister Issam Chalabi (no relation to the neocons' favorite exile, Ahmed
Chalabi) told the Associated Press that "Iraq has more oil fields that have been discovered, but not developed, than any other country in the world." British-based analyst Mohammad Al-Gallani told the Canadian Press that of 526 prospective drilling sites, just 125 have been opened.But the real gem -- what one oil consultant called the "Holy Grail" of the industry -- lies in Iraq's vast western desert. It's one of the last "virgin" fields on the planet, and it has the potential to catapult Iraq to No. 1 in the world in oil reserves. Sparsely populated, the western fields are less prone to sabotage than the country's current centers of production in the north, near Kirkuk, and in the south near Basra. The Nation's Aram Roston predicts Iraq's western desert will yield "untold riches."
Iraq also may have large natural gas deposits that so far remain virtually unexplored.
But even "untold riches" don't tell the whole story. Depending on how Iraq's petroleum law shakes out, the country's enormous reserves could break the back of OPEC, a wet dream in Western capitals for three decades. James Paul predicted that "even before Iraq had reached its full production potential of 8 million barrels or more per day, the companies would gain huge leverage over the international oil system. OPEC would be weakened by the withdrawal of one of its key producers from the OPEC quota system." Depending on how things shape up in the next few months, Western oil companies could end up controlling the country's output levels, or the government, heavily influenced by the United States, could even pull out of the cartel entirely.
Both independent analysts and officials within Iraq's Oil Ministry anticipate that when all is said and done, the big winners in Iraq will be the Big Four -- the American firms Exxon-Mobile and Chevron, the British BP-Amoco and Royal Dutch-Shell -- that dominate the world oil market. Ibrahim Mohammed, an industry consultant with close contacts in the Iraqi Oil Ministry, told the Associated Press that there's a universal belief among ministry staff that the major U.S. companies will win the lion's share of contracts. "The feeling is that the new government is going to be influenced by the United States," he said.
During the 12-year sanction period, the Big Four were forced to sit on the sidelines while the government of Saddam Hussein cut deals with the Chinese, French, Russians and others (despite the sanctions, the United States ultimately received 37 percent of Iraq's oil during that period, according to the independent committee that investigated the oil-for-food program, but almost all of it arrived through foreign firms). In a 1999 speech, Dick Cheney, then CEO of the oil services company Halliburton, told a London audience that the Middle East was where the West would find the additional 50 million barrels of oil per day that he predicted it would need by 2010, but, he lamented, "while even though companies are anxious for greater access there, progress continues to be slow."
Chafing at the idea that the Chinese and Russians might end up with what is arguably the world's greatest energy prize, industry leaders lobbied hard for regime change throughout the 1990s. With the election of George W. Bush and Dick Cheney in 2000 -- the first time in U.S. history that two veterans of the oil industry had ever occupied the nation's top two jobs -- they would finally get the "greater access" to the region's oil wealth, which they had long lusted after.
If the U.S. invasion of Iraq had occurred during the colonial era a hundred years earlier, the oil giants, backed by U.S. forces, would have simply seized Iraq's oil fields. Much has changed since then in terms of international custom and law (when then-Deputy Secretary of Defense Paul Wolfowitz did in fact suggest seizing Iraq's Southern oil fields in 2002, Colin Powell dismissed the idea as "lunacy").
Understanding how Big Oil came to this point, poised to take effective control of the bulk of the country's reserves while they remain, technically, in the hands of the Iraqi government -- a government with all the trappings of sovereignty -- is to grasp the sometimes intricate dance that is modern neocolonialism. The Iraq oil grab is a classic case study.
It's clear that the U.S.-led invasion had little to do with national security or the events of Sept. 11. Former Treasury Secretary Paul O'Neill revealed that just 11 days after Bush's inauguration in early 2001, regime change in Iraq was "Topic A" among the administration's national security staff, and former Terrorism Tsar Richard Clarke told 60 Minutes that the day after the attacks in New York and Washington occurred, "[Secretary of Defense Donald] Rumsfeld was saying that we needed to bomb Iraq." He added: "We all said … no, no. Al-Qaeda is in Afghanistan."
On March 7, 2003, two weeks before the United States attacked Iraq, the U.N.'s chief weapons inspector, Hans Blix, told the U.N. Security Council that Saddam Hussein's cooperation with the inspections protocol had improved to the point where it was "active or even proactive," and that the inspectors would be able to certify that Iraq was free of prohibited weapons within a few months' time. That same day, IAEA head Mohammed ElBaradei reported that there was no evidence of a current nuclear program in Iraq and flatly refuted the administration's claim that the infamous aluminum tubes cited by Colin Powell in making his case for war before the Security Council were part of a reconstituted nuclear program.
But serious planning for the war had begun in February of 2002, as Bob Woodward revealed in his book, Plan of Attack. Planning for the future of Iraq's oil wealth had been under way for longer still.
In February of 2001, just weeks after Bush was sworn in, the same energy executives that had been lobbying for Saddam's ouster gathered at the White House to participate in Dick Cheney's now infamous Energy Task Force. Although Cheney would go all the way to the Supreme Court to keep what happened at those meetings a secret, we do know a few things, thanks to documents obtained by the conservative legal group JudicialWatch. As Mark Levine wrote in The Nation($$):

… a map of Iraq and an accompanying list of "Iraq oil foreign suitors" were the center of discussion. The map erased all features of the country save the location of its main oil deposits, divided into nine exploration blocks. The accompanying list of suitors revealed that dozens of companies from 30 countries -- but not the United States -- were either in discussions over or in direct negotiations for rights to some of the best remaining oilfields on earth.

Levine wrote, "It's not hard to surmise how the participants in these meetings felt about this situation."
According to the New Yorker, at the same time, a top-secret National Security Council memo directed NSC staff to "cooperate fully with the Energy Task Force as it considered melding two seemingly unrelated areas of policy." The administration's national security team was to join "the review of operational policies towards rogue states such as Iraq and actions regarding the capture of new and existing oil and gas fields."
At the State Department, planning was also underway. Under the auspices of the "Future of Iraq Project," an "Oil and Energy Working Group" was established. The full membership of the group -- described by the Financial Times as "Iraqi oil experts, international consultants" and State Department staffers -- remains classified, but among them, according to Antonia Juhasz's "The Bush Agenda," was Ibrahim Bahr al-Uloum, who would serve in Iyad Allawi's cabinet during the period of the Iraqi Governing Council, and later as Iraq's oil minister in 2005. The group concluded that Iraq's oil "should be opened to international oil companies as quickly as possible after the war."
But the execs from Big Oil didn't just want access to Iraq's oil; they wanted access on terms that would be inconceivable unless negotiated at the barrel of a gun. Specifically, they wanted an Iraqi government that would enter into production service agreements (PSAs) for the extraction of Iraq's oil.
PSAs, developed in the 1960s, are a tool of today's kinder, gentler neocolonialism; they allow countries to retain technical ownership over energy reserves but, in actuality, lock in multinationals' control and extremely high profit margins -- up to 13 times oil companies' minimum target, according to an analysis by the British-based oil watchdog Platform (PDF).
As Greg Muttit, an analyst with the group, notes:

Such contracts are often used in countries with small or difficult oilfields, or where high-risk exploration is required. They are not generally used in countries like Iraq, where there are large fields which are already known and which are cheap to extract. For example, they are not used in Iran, Kuwait or Saudi Arabia, all of which maintain state control of oil.

In fact, Muttit adds, of the seven leading oil producing countries, only Russia has entered into PSAs, and those were signed during its own economic "shock therapy" in the early 1990s. A number of Iraq's oil-rich neighbors have constitutions that specifically prohibit foreign control over their energy reserves.
PSAs often have long terms -- up to 40 years -- and contain "stabilization clauses" that protect them from future legislative changes. As Muttit points out, future governments "could be constrained in their ability to pass new laws or policies." That means, for example, that if a future elected Iraqi government "wanted to pass a human rights law, or wanted to introduce a minimum wage [and it] affected the company's profits, either the law would not apply to the company's operations or the government would have to compensate the company for any reduction in profits." It's Sovereignty Lite.
The deals are so onerous that they govern only 12 percent of the world's oil reserves, according to the International Energy Agency. Nonetheless, PSAs would become the Future of Iraq Project's recommendation for the fledgling Iraqi government. According to the Financial Times, "many in the group" fought for the contract structure; a Kurdish delegate told the FT, "everybody keeps coming back to PSAs."
Of course, the plans for Iraq's legal framework for oil have to be viewed in the context of the overall transformation of the Iraqi economy. Clearly, the idea was to pursue a radical corporatist agenda during the period of the Coalition Provisional Authority when the U.S. occupation forces were a de facto dictatorship. And that's just what happened; under L. Paul Bremer, the CPA head, corporate taxes were slashed, a flat-tax on income was established, rules allowing multinationals to pull all of their profits from the country and a series of other provisions were enacted. These were then integrated into the Iraqi Constitution and remain in effect today.
Among the provisions in the Constitution, unlike those of most oil producers, is a requirement that the government "develop oil and gas wealth … relying on the most modern techniques of market principles and encouraging investment." The provision mandates that foreign companies would receive a major stake in Iraq's oil for the first time in the 30 years since the sector was nationalized in 1975.
Herbert Docena, a researcher with the NGO Focus on the Global South, wrote that an early draft of the constitution negotiated by Iraqis envisioned a "Scandinavian-style welfare system in the Arabian desert, with Iraq's vast oil wealth to be spent upholding every Iraqi's right to education, health care, housing, and other social services." "Social justice," the draft declared, "is the basis of building society."
What happened between that earlier draft and the constitution that Iraqis would eventually ratify? According to Docena:

While [U.S. Ambassador to Iraq Zalmay] Khalilzad and his team of U.S. and British diplomats were all over the scene, some members of Iraq's constitutional committee were reduced to bystanders. One Shiite member grumbled, "We haven't played much of a role in drafting the constitution. We feel that we have been neglected." A Sunni negotiator concluded: "This constitution was cooked up in an American kitchen not an Iraqi one."

With a constitution cooked up in D.C., the stage was set for foreign multinationals to assume effective control of as much as 87 percent of Iraq's oil, according to projections by the Oil Ministry. If PSAs become the law of the land -- and there are other contractual arrangements that would allow private companies to invest in the sector without giving them the same degree of control or such usurious profits -- the war-torn country stands to lose up to 194 billion vitally important dollars in revenue on just the first 12 fields developed, according to a conservative estimate by Platform (the estimate assumes oil at $40 per barrel; at this writing it stands at more than $59). That's more than six times the country's annual budget.
To complete the rip-off, the occupying coalition would have to crush Iraqi resistance, make sure it had friendly people in the right places in Iraq's emerging elite and lock the new Iraqi government onto a path that would lead to the Big Four's desired outcome.

__________________
Jah Rastafari

seth106

Bush's Petro-Cartel Almost Has Iraq's Oil (Part Two)
With 140,000 U.S. troops on the ground, the largest U.S. embassy in the world sequestered in Baghdad's fortified "Green Zone" and an economy designed by a consulting firm in McLean, Va., post-invasion Iraq was well on its way to becoming a bonanza for foreign investors.But Big Oil had its sights set on a specific arrangement -- the lucrative production sharing agreements that lock in multinationals' control for long terms and are virtually unheard of in countries as rich in easily accessible oil as Iraq.
The occupation authorities would have to steer an ostensibly sovereign government to the outcome they desired, and they'd have to overcome any resistance that they encountered from the fiercely independent and understandably wary Iraqis along the way. Finally, they'd have to make sure that the Anglo-American firms were well-positioned to win the lion's share of the choicest contracts.
Dealing with the most likely points of opposition began almost immediately. While the Oil Ministry, famously, was one of the few structures the invading forces protected from looters in the first days of the war, the bureaucracy's human assets weren't so lucky. With a stroke of the pen, Coalition Provisional Authority boss L. Paul Bremer fired hundreds of ministry personnel, ostensibly as part of the program of "de-Baathification." But, as Antonia Juhasz, author of "The Bush Agenda," told me, "it wasn't an indication that they were a party to Saddam Hussein's crimes … they were fired because they could have stood in the way of the economic transformation." Some fraction were certainly hard-core Baathists, but they were all veterans of the country's oil sector; they knew the industry, they knew what the norms in neighboring countries were and they had no loyalty to the occupation forces. Some had to go.
That was true at the top as well. Serving as oil minister in the Iraqi Interim Government was Thamir Ghadbhan, a British-trained technocrat who at one time had been chief of planning under Saddam Hussein and was widely respected for his political independence and his opposition to the previous regime (Saddam had ended up imprisoning him at Abu Ghraib). But despite working closely with American advisors, Ghadbhan was replaced with Ibrahim Bahr al-Uloum, a close associate of Ahmed Chalabi, the exile favored by some war planners to run the country as a kindler and gentler -- but no doubt just as corrupt -- version of Saddam Hussein.
According to Greg Muttit, an analyst with the British oil watchdog Platform, Uloum at first seemed to be a malleable figure. He told the Financial Times that he personally favored PSAs and giving priority to U.S. oil companies "and European companies, probably."
But Uloum would later publicly protest the elimination of fuel subsidies, a key provision of the country's economic restructuring, saying, "This decision will not serve the benefit of the government and the people. This decision brings an extra burden on the shoulders of citizens." He was, as the Associated Press reported, given "a forced vacation." It was, in the end, a permanent vacation; Chalabi, who was deputy prime minister at the time, took over the job himself (as "acting" minister for 30 days, but his term would last a year). Chalabi had no previous experience in the oil biz, but was a reliable, pro-Western figure with little in the way of nationalist zeal to get in the way of being a good lap dog. As leader of the Iraqi National Congress, he had said he favored the creation of a U.S.-led consortium to develop Iraq's oil fields. "American companies will have a big shot at Iraqi oil," Chalabi told the Washington Post in 2002.
According to Alexander Cockburn, Chalabi also orchestrated the ouster of Mohammed Jibouri, executive director of the state's oil marketing agency, who had offended the Swiss giant Glencore by telling its executives that they couldn't trade Iraqi oil after their extensive dealings with Saddam Hussein.
An emerging, although still fragile, civil society was another source of potential trouble. Iraqi trade unions were a thorn in the side of the CPA -- shutting down the port of Khor az-Zubayr in protest of a rip-off deal with the Danish shipping giant Maersk, halting oil production in the south to demand the rehire of laid-off Iraqi workers and kicking Halliburton subsidiary Kellogg, Brown and Root out of their refineries. Perhaps it's not a coincidence, then, that the only significant law that Paul Bremer left on the books from the Hussein era was a prohibition against organizing public-sector workers. Raed Jarrar, an Iraqi analyst with the NGO Global Exchange, told me, "They're having a lot of legal problems."
Of course, none of that guaranteed that the Iraqis would stay on the preferred path, especially after the election of an ostensibly sovereign government.
And that's where the most common -- almost ubiquitous -- tool of neocolonialism, debt, came into play. In this case, massive, crushing debt run up by a dictator who treated himself and his cronies to palaces and other luxuries, spent lavishly on weapons for Iraq's war with Iran -- fought in part on behalf of the United States -- and owed Kuwait billions of dollars in reparations for the 1990 invasion.
To put Iraq's foreign debt in perspective, if the country's economy were the size of the United States', then its obligations in 2004, proportionally, would have equaled around $55 trillion, according to IMF figures (and that doesn't include reparations from the first Gulf War).
Clearly, that amount of debt was unsustainable, and the Bush administration launched a full-court press to get creditor nations to forgive at least part of the new government's debt burden. Former Secretary of State James Baker, long the Bush family's "fixer," was dispatched on a tour of the world's capitals to cut deals on behalf of the Iraqis.
The administration raised eyebrows in the NGO community when it adopted the language of debt-relief activists to frame their pitch. Bush, and Baker, called it "odious" debt, debt that financed the whims of a brutal dictator and used against the interests of the Iraqi population. Under international law, "odious" debt, in theory at least, doesn't need to be forgiven; it's written off as a dictator's illicit gains. As one might expect, wealthy creditor nations have long resisted the concept.
Debt-relief activists Basav Sen and Hope Chu wrote that the move "seemed inexplicable at first." But it soon became clear that Iraq's debt-relief program was, in fact, a way of locking in Iraq's economic transformation.
The largest chunk of debt, $120 billion, was owed to the Paris Club, a group of 19 industrialized nations. Baker negotiated a deal whereby the Paris Club would forgive 80 percent of Iraq's debt, but the catch -- and it was a big one -- was that Iraq had to agree to an economic "reform" package administered by the International Monetary Fund, an institution dominated by the wealthiest countries and infamous across the developing world for its painful and unpopular Structural Adjustment Protocols.
The debt would be written off in stages; 30 percent would be cancelled outright, another 30 percent when an elected Iraqi government accepted an IMF structural reform agreement and a final 20 percent after the IMF had monitored its implementation for three years. This gave the IMF the role of watchdog over the country's new economy, despite the fact that its share of the country's debt burden was less than 1 percent of the total.
Among a number of provisions in the IMF agreement, along with privatizing state-run companies (which resulted in the layoffs of an estimated 145,000 Iraqis), slashing government pensions and phasing out the subsidies on food and fuel that many Iraqis depended on, was a commitment to develop Iraq's oil in partnership with the private sector. Then-Finance Minister Adel Abdul Mehdi said, none too happily, that the deal would be "very promising to the American investors and to American enterprise, certainly to oil companies." The Iraqi National Assembly released a statement saying, "the Paris Club has no right to make decisions and impose IMF conditions on Iraq," and called it "a new crime committed by the creditors who financed Saddam's oppression." And Zaid Al-Ali, an international lawyer who works with the NGO Jubilee Iraq, said it was "a perfect illustration of how the industrialized world has used debt as a tool to force developing nations to surrender sovereignty over their economies."
The IMF agreement was announced in December of 2005, along with a new $685 million IMF loan that was to be used, in part, to increase Iraq's oil output. The announcement came a month after Iraqis went to the polls to vote for their first government under the new Constitution in order, according to the Washington Post, to spare Iraqi "politicians from voters' wrath." That was a wise idea; immediately following the agreement, gas prices skyrocketed and Iraqis rioted.
The icing on the cake is that the deal James Baker negotiated with the Paris Club refers to Iraq as an "exceptional situation"; no precedent was set that would allow other highly indebted countries saddled with odious debt from their own past dictators to claim similar relief.
The deadline the Iraqi government must meet for the completion of its final oil law in December is a "benchmark" in the IMF agreement.
In an investigation for the Nation, Naomi Klein discovered that Baker had pursued his mission with an eye-popping conflict of interest. Klein discovered that a consortium that included the Carlyle Group, of which Baker is believed to have a $180 million stake, had contracted with Kuwait to make sure that the money it was owed by Iraq would be excluded from any debt-relief package. When Baker met with the Kuwaiti emir to beg forgiveness for Iraq's odious debt, he had a direct interest in making sure he didn't get it.
Another major creditor was Saudi Arabia. The Carlyle Group has extensive business dealings with the kingdom and Baker's law firm, Baker Botts, was representing the monarchy in a suit brought by the families of the victims of 9/11.
The most recent IMF report (PDF) shows how successfully he failed: "While most Paris Club official creditors have now signed bilateral agreements, progress has been slow in resolving non-Paris Club official claims, especially those of Gulf countries," it says. It's likely that Iraq, a country occupied for three years, devastated by 12 years of sanctions and with a per capita GDP of $3,400, will end up paying reparations to Kuwait, a country with a per capita GDP of over $19,000, for the five months Saddam occupied his neighbor in late 1990 and early 1991.
Iraq will still face a mountain of debt even if it meets all of the "benchmarks" required of it -- the IMF expects the country's debt service to equal five percent of its economic output in 2011 and warns that even a minor price shock in the oil market "would require significant borrowing from the international markets to close the financing gaps."
"Sovereign" debt is transferable between governments; if a new strongman arises or Iraq becomes a loose federation, the debt will remain on the books and defaulting on it, while a possibility, has serious long-term consequences.
All of this is about bringing different forms of pressure onto Iraq's nascent government, not controlling it, and it's an important distinction. Before and since the "handover" to Iraq's government, the Green Zone has been overrun with "advisers" from Big Oil. Aram Roston wrote, "It's clear that there is not just the one Iraqi Oil Ministry, but a parallel 'shadow' ministry run by American advisers." In business, that's known as "positioning."
Phillip Carroll, a former chief executive with Royal Dutch/Shell and a 15-member "board of advisors" were appointed to oversee Iraq's oil industry during the transition period. According to the Guardian, the group "would represent Iraq at meetings of OPEC." Carroll had been working with the Pentagon for months before the invasion -- even while the administration was still insisting that it sought a peaceful resolution to the Iraq crisis -- "developing contingency plans for Iraq's oil sector in the event of war." According to the Houston Chronicle, "He assumed his work was completed, he said, until Defense Secretary Donald Rumsfeld called him shortly after the U.S.-led invasion began and offered him the oil adviser's job." Carroll, in addition to running Shell Oil in the United States, was a former CEO of the Fluor Corp., a well-connected oil services firm with extensive projects in Saudi Arabia and Kuwait, and at least $1.6 billion in contracts for Iraq's reconstruction. He was joined by Gary Vogler, a former executive with ExxonMobile, in Iraq's Office of Reconstruction and Humanitarian Assistance.
After spending six months in the post, Carroll was replaced by Robert E. McKee III, a former ConocoPhillips executive. According to the Houston Chronicle, "His selection as the Bush administration's energy czar in Iraq" drew fire from congressional Democrats "because of his ties to the prime contractor in the Iraqi oil fields, Houston-based Halliburton Co. He's the chairman of a venture partitioned by the … firm."
The administration selected Chevron Vice President Norm Szydlowski to serve as a liaison between the Coalition Provisional Authority and the Iraqi Oil Ministry. Now the CEO of the appropriately named Colonial Pipeline Co., he continues to work with the Iraq Energy Roundtable, a project of the U.S. Trade and Development Agency, which recently sponsored a meeting to "bring together oil and gas sector leaders in the U.S. with key decision makers from the Iraq Ministry of Oil."
Terry Adams and Bob Morgan of BP, and Mike Stinson of ConocoPhillips would also serve as advisors during the transition.
After the CPA handed over the reigns to Iraq's interim government, the embassy's "shadow" oil ministry continued to work closely with the Iraqis to shape future oil policy. Platform's Greg Muttit wrote that "senior oil advisers -- now based within the Iraq Reconstruction Management Office (IRMO) in the U.S. Embassy ... included executives from ChevronTexaco and Unocal." After the handover, a senior U.S. official said: "We're still here. We'll be paying a lot of attention, and we'll have a lot of influence. We're going to have the world's largest diplomatic mission with a significant amount of political weight."
The majors have also engaged in good, old-fashioned lobbying. In 2004, Shell advertised for an Iraqi lobbyist with good contacts among Iraq's emerging elites. The firm sought "a person of Iraqi extraction with strong family connections and an insight into the network of families of significance within Iraq." According to Platform, just weeks after the invasion, in a meeting with oil company execs and Australian Foreign Minister Alexander Downer in London, former British Foreign Secretary Sir Malcolm Rifkind promised to personally lobby Dick Cheney for contracts on behalf of several firms, including Shell.
Meanwhile, major oil firms were positioning themselves so that they'd have the best contacts in the new government. According to the Associated Press, "The world's three biggest integrated oil companies" -- BP, ExxonMobil and Royal Dutch/Shell -- "struck cooperation or training deals with Iraq" in 2005. "It's a way to maintain contact and get the oil officials to know about them," former Iraqi Oil Minister Issam Chalabi told the AP. And it seems to have worked; in May, Iraq's current oil minister, Husayn al-Shahristani, said that one of his top priorities would be to finalize an oil law and sign contracts with "the largest companies."
Washington has its hands all over the drafting of that law. Early on, in 2003, USAID commissioned BearingPoint, Inc. -- the new name for the scandal-plagued Arthur Anderson Consulting -- to submit recommendations for the development of Iraq's oil sector. BearingPoint was the firm that designed the country's economic transformation under a previous USAID contract, so it was no surprise that its report reinforced the preference for PSAs that "everybody [kept] kept coming back to" during meetings of the State Department's "Future of Iraq Project."
In February, just months after the Iraqis elected their first constitutional government, USAID 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." According to Muttit, the Iraqi Parliament had not yet seen a draft of the oil law as of July, but by that time it had already been reviewed and commented on by U.S. Energy Secretary Sam Bodman, who also "arranged for Dr. Al-Shahristani to meet with nine major oil companies -- including Shell, BP, ExxonMobil, ChevronTexaco and ConocoPhillips -- for them to comment on the draft."
All of these points of pressure are only what we can see in the light of day. There is certainly much more occurring under the table. Raed Jarrar told me that he "was personally familiar with the kind of intimidation that can be brought by both the U.S. military and civilian" personnel, and that he would be shocked if "multiple millions of dollars in bribes" were not changing hands. The IMF noted in its latest report (PDF) that "corruption related to the production and distribution of refined fuel products was rampant." Last March, 450 Oil Ministry employees were fired for suspected corruption, and Mohammed al-Abudi, the Oil Ministry's director general for rrilling, said that "administrative corruption" was pervasive. "The robberies and thefts are taking place on a daily basis on all levels," he said, "committed by low-level government employees and by high officials in leadership positions of the Iraqi state." The same day that the U.N. legitimized the occupation, George Bush signed Executive Order 13303 providing full legal immunity to all oil companies doing business in Iraq in order to facilitate the country's "orderly reconstruction."
Yet, despite a five-year effort, Big Oil still sits on the sidelines, wary of the disorder and violence that's plagued the country. Ironically, it appears that China may well receive the first deal in post-Saddam Iraq (although it's one negotiated with Hussein's government before the war). The Kurdish autonomous zone has signed three PSAs -- none with the majors -- although there is some dispute about their validity (and, at this writing, there are reports that the Kurds are in negotiations with Royal Dutch/Shell and BP, among others).
At this point, the situation is very fluid. Last week, Iraqis were shocked when a controversial measure that might lead to the country's effective breakup was passed by Parliament by one vote. The major Sunni parties and Muqtada al Sadr's ministers boycotted the vote in outrage. Muddying the waters further is a heated debate about whether a somewhat ambiguous provision in the Iraqi Constitution already gives provincial governments the right to hold on to oil revenues rather than send them to the central government. The results of all of these debates will have an enormous impact on Iraq's chances to build an autonomous and potentially prosperous country down the road.
It's possible that the administration and its partners badly overplayed their hand. Iraq's new government stands on the verge of a complete meltdown, faced with a crisis of legitimacy based largely on the fact that it is seen as collaborating with American forces. Overwhelming majorities of Iraqis of every sect believe the United States is an occupier, not a liberator, and is convinced that it intends to stay in Iraq permanently. "If you go in front of Parliament, Raed Jarrar told me, "and ask: 'who is opposed to demanding a timetable for the Americans to withdrawal?' nobody would dare raise their hand." The passage of a sweetheart oil law could prove to be a tipping point. It's also possible Iraq's government won't make it to December; at this writing, rumors of a "palace coup" are swirling around Baghdad, according to Iraqi lawmakers.
What is clear is that the future of Iraq ultimately hinges to a great degree on the outcome of a complex game of chess -- only part of which is out in the open -- that is playing out right now, and oil is at the center of it. It's equally clear that there's a yawning disconnect between Iraqis' and Americans' views of the situation. Erik Leaver, a senior analyst at the Institute for Policy Studies in Washington, told me that the disposition of Iraq's oil wealth is "definitely causing problems on the ground," but the entire topic is taboo in polite D.C. circles. "Nobody in Washington wants to talk about it," he said. "They don't want to sound like freaks talking about blood for oil." At the same time, a recent poll asked Iraqis what they believed was the main reason for the invasion and 76 percent gave "to control Iraqi oil" as their first choice.
Joshua Holland is an AlterNet staff writer.

seth106

Baghdad-Bodies
Police officer killed, 20 bodies found in Baghdad
Baghdad, Oct 18, (VOI) – Unknown gunmen shot dead an Iraqi police officer in eastern Baghdad while 20 bodies were found dumped in different places in Baghdad city during the last 24 hours, Iraqi interior ministry sources said on Wednesday.
“Gunmen shot dead on Wednesday morning the police captain Imad Abbas in Baladiyat neighborhood, east of Baghdad,” one of the sources told the independent news agency Voices of Iraq (VOI).
“20 bodies were found dumped in different places in Baghdad city during the last 24 hours,” an interior ministry source said.
Most of the bodies “were unidentified and some bore torture marks while most were killed with gunshots in different parts of the body,” said the source who declined to be named.
The death toll has been on the rise with an escalation in sectarian killings. The United Nations estimate that about 100 people are killed everyday in Iraq

seth106

Study of Iraqi Dead Shocking, But Sound Science

By AScribe Newswire

WASHINGTON, Oct. 18 (AScribe Newswire) -- The Statistical Assessment Service ( http://www.STATS.org ) - a non-profit, non-partisan media research organization affiliated with George Mason University and committed to correcting scientific misinformation in the media - finds the study estimating 650,000 excess Iraqi casualties since American forces entered the country to be methodologically sound.

In an analyis released today, STATS Director of Research Dr. Rebecca Goldin defended the research technique of cluster sampling behind the study, writing that "the methods used by this study are the only scientific methods we have for discovering death rates in war torn countries without the infrastructure to report all deaths through central means. Instead of dismissing over half a million dead people as a political ploy ... we ought to embrace science as opening our eyes to a tragedy whose death scale has been vastly underestimated until now."

She goes into great detail about both the strengths of the research, as well as the arguments against it.

- Prior Support from the Scientific Community:

While the Lancet numbers are shocking, the study's methodology is not. The scientific community is in agreement over the statistical methods used to collect the data and the validity of the conclusions drawn by the researchers conducting the study. When the prequel to this study appeared two years ago by the same authors (at that time, 100,000 excess deaths were reported), the Chronicle of Higher Education published a long article explaining the support within the scientific community for the methods used.

- The Methodology of "Cluster Sampling":

Cluster sampling is a well-established in statistics, and is routinely used to estimate casualties in natural disasters or war zones. For the Iraq study the researchers randomly chose people to interview about deaths in their families, interviewed a cluster of households around them, and then extrapolated the results to the whole population. There is nothing controversial in the method itself, though people can certainly question whether the sampling was done correctly.

- Attacks on Study are Ideological, not Scientific:

There has been a wealth of material on the web attacking the Lancet study. Most of it is devoid of science, and ranges from outrage at the numbers (it's impossible to believe it could be so high), to accusations of bias based on the authors' views of U.S. foreign policy. Interested parties such as the Iraqi government responded quickly by calling the numbers "inflated" and "far from the truth", rather than putting forward any real reasons why these numbers are unlikely to have occurred. President Bush, for one, says he does "not consider it a credible report."

Click here to read Dr. Goldin's analysis in its entirety

Since its founding in 1994, the non-profit, non-partisan Statistical Assessment Service (STATS) has become a much-valued resource on the use and abuse of science and statistics in the media. Its goals are to correct scientific misinformation in the media resulting from bad science, politics, or a simple lack of information or knowledge; and to act as a resource for journalists and policy makers on major scientific issues and controversies. To find out more about STATS, visit STATS.org - home page.

CONTACT: Matthew Felling mfelling[at]cmpa.com

seth106

8 courts-martial ordered in rape, murder cases

4 U.S. soldiers face charges over girl's death in Iraqi town of Mahmoudiya

Ali Mamori / AP file
Mohammed al-Janabi, uncle of the girl allegedly raped and killed by U.S. soldiers, displays death certificates and IDs on his niece's grave in Mahmoudiya, north of Baghdad, on Thursday.
Suicide attacks and murders due to sectarian conflict continue around Iraq. See how residents live their lives amid the attacks.



EVANSVILLE, Ind. - Four soldiers from the U.S. Army's 101st Airborne Division will be court-martialed for the alleged rape of an Iraqi girl and the murder of her family, and two will face the death penalty, the military ordered Wednesday.
The charges against the Fort Campbell soldiers stem from rape and murder of 14-year-old Abeer Qassim al-Janabi in her family's home in Mahmoudiya, about 20 miles south of Baghdad — a case that sparked international outrage and added more fuel to claims of abuse by U.S. forces in Iraq.
The charges came as the military announced that a total of eight soldiers would be court-martialied, with the four others to be tried in a separate court martial on charges of murdering Iraqi prisoners in northern Iraq's northern Salahuddin province during a raid on a village.

In the rape and murder case, military authorities said they would seek the death penalty against Sgt. Paul E. Cortez and Pfc. Jesse V. Spielman.
Spc. James P. Barker and Pfc. Bryan L. Howard are also accused in the rape and murders but will not face the death penalty, the military said in a statement.
Former Pvt. Steven Green, who was discharged for a personality disorder and arrested in North Carolina, will be tried in federal court in Kentucky. Green has pleaded not guilty to one count of rape and four counts of murder.
Military prosecutors have said the five — all from the division's 502nd Infantry Regiment — planned the attack from a checkpoint near the family's home, changed their clothing to hide their identities and set the girl's body on fire to destroy evidence.
In the other case, Pfc. Corey R. Clagett, Spc. William B. Hunsaker, Staff Sgt. Raymond L. Girouard and Spc. Juston R. Graber are accused of murdering three Iraqi men taken from a house May 9 on a marshy island outside Samarra, about 60 miles north of Baghdad.
This breaking story will be updated.

Butterfly

"Now watch that drive" - GW Bush 2003

seth106

English Translation of Saddam Hussein Letter

Dated October 15th, 2006

10/18/06 -- -- Translation By Roads to Iraq

In the name of God the Merciful God who gives us patience and takes our souls as Muslims” Qur’an 40:51

To the great nation, to honorable Iraqi ladies, to the heros of our armed forces, to our glorious nation.

Dear friends in the world. Peace upon you, God’s mercy and blessings.

To Humanity, this set its duty towards itself and others on the basis of fraternity, equality, rejection of superiority, sordid exploitation and exclusion of wills.

Friends, around the world, peace upon you, and God’s mercy and blessing.

On the occasion of month Ramadan which emerged on us this year and our lives in a very difficult situation, exposed to injustice, aggression and embargo since 1991until now, our people experience hard times under the occupation, the killing, the destruction and looting everything alive in Iraq except its faith and its pride which rejects humiliation, treachery and aggression from far and near neighbors some them came as invaders across the Atlantic inspired by the treacherous Zionist ambitions, unjustified interests and aggressiveness.

Some of them are coming from the east of our land, they are bad as usual, you know brother i am a free in my thoughts and opinions but because I am detained by the invading forces. So, my chances are limited and restricted to express my feelings and my will, especially when I direct them to you [Iraqis] through the media, or during this farce court if they don’t close the microphone to block a right opportunity to address the people at the same time when their vanity media is trying to eat your flesh alive

Here I am addressing you today in this holy month saying:

Resisting the invaders is the right and duty, the same goes to the people who collaborated with western or the eastern enemy. But I ask you, brothers and comrades under different titles and names in the brave Iraqi resistance and the people of proud Iraq to consider truth and justice in your Jihad, and don’t let overreacting mislead you. I ask you to keep the door of forgiveness rather than tolerance with the one who lost the true path, if they show some hope that they can be right guided, and remembers you have the duty to save him from himself and show him the right path. Keep the door of forgiveness open to everyone until the instant precedes the liberation which is coming soon in God allow it.

Remember and don’t forget that your goal is to liberate your country from the invaders and its collaborators and striking the enemy is easier to forgive it even if they chose to retreat, whether internal or external enemy. You recall that after every war there is peace, after each difference there is unity, after separation there is reunion, and after all hatred God will return it as familiarity. Humanity is the same, and you people are one great nation, learned in the cradle of the our land the greatest principles of human beings, and the purist religion, your spread monotheistic to civilizations, and rescued them from their ignorance and savagery. You sacrificed before for these values and sacrificed today for the same values, ahead of it the great unified Iraq, not fragmented under any color, group or allegation, this fact is the candle inside us dispel the darkness.

Brothers, my heart and tongue does not allow me to speak with you and addresses by your colors and titles, which made by the foreigners, Iraq was never been a symbol of separation, we all remember it in its beautiful colors which represent the situation in one great Iraq Arabs, Kurds and from every religion, sect or minority, we were proud that we are one nation.

Dear brothers, you have been oppressed by the invaders, their follower and their associates, so don’t oppress anybody, because you will loss God’s right, and make it easy for the opportunists to distort your struggle, and this is a big loss if its happened, and if you win then remember it is God’s victory and you are his soldiers. You have to show forgiveness and put the blood of your sons and brother (under the carpet), even the sons of Saddam Hussein, forgiveness with no return, we recall the tales of our merciful profits, Mohammad and Jesus, they forgave even the ones who insulted them, don’t forget that Mohammad forgive the pagans in Mecca after he accomplished victory. I know the heart of the freedom fighter and love to his nation, his people after his love to God, I expect you to heal the wounds and not to open new wounds.

Brothers, after you forgive the perpetrators, act to apply the law fairly and firmly, so your nation can enjoy the blessing of stability, security and flourish with culture, science and law, peaceful happy life. In this glorious month and you know that there no authority above me but the authority of the truth…. Saddam Hussein is not to be threaten, Saddam Hussein, as you know and he will stay as your knew him. God is great… God is great … … Glory to God, our nation, our people and the mujahideen … God is great and long live Iraq … Long live Iraq … Long live Palestine … Long live our glorious nation’s in Every year, our people, our nation and the peace-loving people … God is greater.

Saddam Hussein
President of Iraq and Commander in Chief of Iraq’s Arms Forces

15 / October / 2006

seth106

Iraq orders US to release Shia activist
(AFP)

18 October 2006
BAGHDAD - Iraqi Prime Minister Nuri Al Maliki ordered the release Wednesday of a leading member of radical Shia cleric Moqtada Al Sadr’s political organisation who was detained by US troops, state television said.
Relatives and supporters of Sheikh Mazen Al Saedi confirmed he had been released, while a Sadr spokesman said Iraqi interior ministry vehicles brought him to the Shia movement’s offices in the Kadhimiya district of Baghdad.
Sadr’s organisation, which includes several thousand armed fighters, complained Tuesday that Saedi, one of the party’s precinct captains in Baghdad, had been arrested by US troops along with five of his supporters.
The US military has thus far refused to confirm or deny the arrest but state television quoted Iraq’s national security adviser, Muwaffaq Al Rubaie, as saying the prime minister had ordered his release.
“He was released,” confirmed Sadr spokesman Hamdallah Al Rikabi, accusing US forces of trying to provoke the movement into armed confrontation.
“Everybody knows that the Sadr Movement is a patriotic movement seeking to fight terrorism. The occupation forces always choose to detain our members, and only our members, because they want a confrontation.
“We are not too weak to face the occupier, but our leadership wants us to remain quiet,” he added, demanding that the Iraqi government issue a statement to explain Saedi’s brief detention.
American commanders privately accuse Sadr’s Mahdi Army of being one of the main forces behind Iraq’s recent descent into sectarian bloodletting, and a rise in the number of fatal attacks on US troops.
Maliki, however, warns it will be difficult to disarm a militia with such popular support and has said that he vetoed a US plan to invade Sadr’s stronghold in the impoverished east Baghdad suburb of Sadr City.
Before news of the release emerged, several hundred Sadr supporters gathered in the Shuala district of eastern Baghdad to protest Saedi’s alleged detention and demand both his release and ”the end of the occupation”.
Activists chanted: “No, no to America! No, no to Israel!”
There were no weapons on display at the protest, unlike at some previous rallies in Baghdad, where assault rifles and rocket launchers have been openly paraded by masked Mahdi Army fighters.
“The occupiers have begun arresting the sons of this injured country. The occupiers have never been defenders of freedom,” said protest leader Sheikh Hadi Al Mohammedawi, who had not heard the report of the release.
“They arrest the people of this area, which is a shelter for poor and displaced, and leave the regions of terror,” he alleged, implicitly comparing Shia east Baghdad to other areas roamed by Sunni insurgents.
Nevertheless, a threatened strike, which was to have been organised in Baghdad’s hospitals and schools did not materialise, and the protest leader read out a letter from Sadr himself calling it off.

spliff

That's good news....what's the point of this thread?