I'm moving my post of yesterday from 'Iraqi voting disrupts news reports of bomibings' to this new thread which I'm calling 'Iraq: the good oil'. I'm doing this so that the oil issue doesn't become buried by other discussions. As Iraq is about to appoint a new Oil Minister, as part of a broader Cabinet reshuffle, and also adopt a new national oil law which is meant to be debated in the Iraqi parliament this month, the issue will become topical soon.

Anyway, here's the posting from yesterday:

I'm trying to move this thread toward the front rather than let it drop off the page. I still intend to respond more fully, probably starting a new thread on oil. I've done some research over the past few weeks, as time has allowed, and am more concerned with responding to the source document which bpors, and thousands of others around the world presumably, have used as the basis for their claim that we are about to witness a return to the colonial era of oil concessions in Iraq. I feel that I have replied convincingly to bpors request for evidence that Saddam was a 'US man'. But the source document for his views - 'Crude Designs: the rip off of Iraq's oil wealth', by Greg Muttitt and others - requires addressing directly as it has had a significant impact world-wide. The link to it is here: http://www.globalpolicy.org/security/oil/2005/crudedesigns.htm 

 

As I said, I will start a separate thread on it soon, as time allows, but for now, just to keep the bpors' debate going, I'd like to show just how the oil mantra blinds people to facts. Bpors says, without qualification:

"But behind the scenes the money boys will be jacking up the oil prices and making a bundle. American oil companies want the price of oil to get to $65 a barrel and stay there. That is a thousand percent profit on Iraqi oil! American oil companies own most of the oil refineries around the world. Check it out."

 

There are two points there: the first, that the US oil companies actually want the price of oil to increase, is mainfestly absurd. As they import the oil, it is in their interests for the price to be cheaper, not dearer.

 

The second point is that American oil companies own most of the oil refineries in the world. This too is false. Hence bpors tells us to "Check it out", as though we should do the research he has not done. If he had done some elementary research himself, instead of telling us to do it for him, he would not make such a ridiculous claim. The reality is that 77% of the world's 1.1 trillion barrels in proven oil reserves is controlled by governments that significantly restrict access to intenrational companies. My source here is the American oil industry consulting firm, PFC Energy. Check out the report: http://api.org/aboutoilgas/security/blumnatoilfirms.cfm  

 

Elsewhere, bpors has stated that the US oil companies intend getting Iraqi oil for $1 per barrel. Should the new Iraqi government attempt to sell it at that price on the world market, I'm sure OPEC would have something to say. I think he is talking here about the relatively inexpensive cost of Iraqi oil at the well-head. But, I do know one thing: he has no idea what it cost under Saddam. If he did know, if he had done the research, he wouldn't make such a statement because, under Saddam, the cost of extraction of Iraqi oil was still around $1 per barrel. My source here is the US Department of Energy, cited in a Guardian report: http://observer.guardian.co.uk/international/story/0,6903,882512,00.html   

More later, in a new thread (over the next few days),

Barry

I'm still working on the critique of Greg Muttit's 'Crude Designs' research paper but do not want to keep delaying responses to specific points by bpors. I'll do that now, but then want to focus on the 'Crude Designs' document, which is being accepted at face value by anti-war activists around the world, and which will form the foundation of their protests once the new Iraqi national oil law is promulgated. I think bpors has read little beyond that document and I think that individuals should always seek out, and try to understand, other points of view which challenge theirs. To merely 'study' stuff that reinforces one's own prejudices or pre-existing views is best left to the religious.

For instance, bpors says, "The puppet government will sign over Iraq's oil rights to EXXON and the like". LOL on that one: the main parties in the Iraqi parliament are a bloc dominated by SCIRI and DAWA. Yeah, sure, 'US puppets'! Bpors is certain that oil rights will be signed over because the 'Crude Designs' document, and the vast numbers of leaflets and on-line articles based on it, tells him that Production Sharing Agreements (which the Iraqi government will allmost certainly enter into with foreign, US, oil companies) are just a new form of colonialism, that the PSAs are the new way of US big oil taking control and ownership of resources. Most people do not know what PSAs are - I didn't before being compelled by argument with bpors and others to undertake some research. In my next post, I will show how this is nonsense and is consistent with the 'dependency theory' which, regardless of facts, is ideologically committed to seeing the 'periphery' eternally ripped off by the 'centre'. I will argue that PSAs are probably the best way for Iraq to proceed.

I said in an earlier thread that it is easy to refute bpors' claim that "The major oil companies took no oil out of Iraq prior to the invasion". Bpors anticipated my response - that EXXON et al actually imported lots of oil from Iraq. (Actually the main US importers, at least during the regime's final years, were Valero Energy, Chevron, EXXON, BP and Marathon Oil. According to Forbes magazine, in 2001, 70% of Iraq's 2.4 million barrels per day prodcution went to EXXON Mobil, Chevron Texaco, BP and Marathon. Forbes' source: http://www.forbes.com/2002/04/08/0408oil.html) To me, that is 'taking it out of Iraq'. Bpors cannot understand this because what matters to him is that taking out oil can only happen if the companies own or control the fields. This is just more nonsense. Since the spate of nationalizations in the oil-rich countries of the 1960s and 1970s, and the formation of OPEC, the US 'Big Oil' has got what it wants precisely by importation. It's not the US government that imports the oil - it's the big companies, EXXON, Chevron, etc. They pay for it, and they get it.

Bpors seems to think this happens without direct linkage between the companies and the Iraqi government. Iraq sells the oil and 'it makes its way to America'. Iraq under Saddam sold oil to the US companies. And, under Saddam, big US companies like Halliburton helped build the oil infrastructure, like the strategic Mina al-Bakr oil export terminal, that made it possible to transport the oil overseas. There was and is nothing wrong with that per se - the problem was that the Baath regime was fascistic. The oil wealth propped the regime up, enabling it to kill a million people during the war with Iran, oppress its own people, and then enabling the regime to invade Kuwait. The point I'm making is that none of the OPEC nations shut themselves completely off from foreign investment, including Iraq.

Bpors seems to think that when companies import oil, it is not very profitable. He says, "That is no great profit for EXXON and Co." He reckons, "They want to operate and control the oil fields, that is where the real money is, not be on the outside looking in". Again, this is just wrong. The big US companies rely on importation (as I showed in the previous post: 77% of the proven oil reserves of the planet are controlled by governments that significantly restrict access to foreign companies). Importation is how they make their big bucks. And the profits are soaring and at record levels.

Operating and controlling oil fields can be more profitable, but not necessarily so. There are huge costs to a company that invests in exploration and development of oil fields. And there is considerable risk. Iraq's problem is that 'Big Oil' will not be terribly interested, will not put its money where its mouth (interest) is, until Iraq is a more secure environment for investment. US and other oil companies are making big profits because the supply is not meeting the demand (China being a relatively new huge-scale oil-importer on the stage), and because of the quasi-cartel operations of OPEC.

Bpors and other conspiracy theorists might just as well conclude that US Big Oil is secretly sponsoring the Iraqi resistance because it is the insurgency that is keeping prices high, and restricting supply, by effective campaigns of sabotage and smuggling. (The latter is estimated to be costing Iraq billions and also helping to fund the insurgents). The defeat of the insurgency and the development of a more stable and secure political and social environment in Iraq will allow production to expand and will, in the long term, add significantly to world supply. Oil-rich autocrats in the region will be with bpors in the desire to thwart the increase in Iraq's oil capacity. The establishment of stability with democracy in Iraq offers a win-win situation for the Iraqi people: vastly increased revenue from significantly increased oil output on one hand and the further destablization of the neighbouring autocrats who have kept the price of oil artificially high for three decades (and been able to maintain their corrupt dictatorships through the easy oil wealth).

Remarkably, bpors compares the prospect of increased oil production capacity in Iraq to the heroin trade in Afghanistan "post-2002". Yep, nothing like theocratic-fascists to keep drug dealing off the streets. (And this guy claims to be on the left?!) But in Iraq we're talking oil, a vital source of energy, not addictive drugs that ruin individual lives. The future of Iraq is clearly tied up with the development - the 'unleashing' if you will - of oil production. Those of us who support the development of democracy in Iraq realize that Iraq's oil industry is in dire need of rehabilitation, refurbishment, repair, consolidation and expansion. In my next post, I'll offer some thoughts on the 'Crude Designs' document, including its 'economic models'/options for Iraq.

Barry

PS - Further to my response to bpors' claim that US big oil wants to produce Iraqi oil for one dollar per barrel, I must point out that (assuming he means the extraction cost) the Middle East in general, not just Iraq, has had similarly low costs for a long time. Yet this figure of one-dollar-per-barrel is presented as something new and sinister.

bpors assured us that "American oil companies own most of the oil refineries around the world. Check it out". 

He also adopted the stance of the expert by saying:

Well, you are right: I misread those figures. I'm finding it impossible to find data on the extent of US ownership of the world's refineries but will not give up. Bpors told me to 'check it out' and that's what I'm doing, or trying to do. It would have helped had he given the source for his own claim but, hey, that'd be expecting a lot from him.

I will persist and report back.

If anyone else has evidence one way or the other, I'd be happy to have it. And if anyone can see any flaws in my previous posts in this thread, please let me know.

Barry

If anyone tries to tell you in simple terms that the US oil companies own most of the refineries in the world, ask them for their source - and then make sure the source has credibility. What I have learned, from too many hours trawling the 'net for reliable information that answers the question, is that the answer ain't simple - but the best estimate is that US companies own about one-third of the refineries in the world. (This is fortuitous for me, as it is close to my my mis-reading (identified by patrick) of the figures in my previous post). The main reason it isn't simple is because, in this age of globalisation and company ownership occurs across borders. Bpors and other pseudo-leftists tend to see the world divided starkly between US imperialism and everyone else: US companies dominate, pull the strings of governments to get their way internationally, the poorer countries are victims, exploited and made dependent on 'the US' while Americans grow fat on the proceeds of 'Third World' exploitation. Facts are force-fitted into this world view - but no matter how hard they try (wish), the square peg doesn't fit into the round hole.

Early on in my searches, I came across a wikipedia list of oil refineries. The list contains more than 500 companies across the planet, by country, but the entry points out that the list is incomplete and also it isn't useful for the purposes here unless one has the knowledge of ownership of each company. Here is the list of oil refineries: http://en.wikipedia.org/wiki/List_of_oil_refineries  Anyhow, to cut a long story short, I ended up consulting an oil consultancy firm in the US. The consultancy is called Gibson Consulting Gravity-Magnetic-Geologic Interpretations for oil exploration - http://www.gravmag.com - and has excellent information and links about the oil industries internationally on its website.

The consultant was very generous with the effort in his emails. He went through the wikipedia list and offered the estimate that, of the 518 companies, 165 are US owned. The following is from his email:

I wonder if any of this influences people such as bpors? Can anyone out there see significant faults with any of the above?

   Barry

byork,

thank you for your investigative work. I can't see any significant errors.

A single country owns or controls over 1 third of the world's oil refineries!!! I never thought it was as much as that. Maybe with the Brits combined, I thought it might. But not by themselves. Amazing. It would control more than China, Russia, and France combined, one would think. Certainly a colossus on the world economic/political scene, as you so well point out.

No wonder they have so much pull in Washington. No wonder they have entire fleets of warships stationed out wherever they operate.

How is Iraq doing, btw? Has it become that tranquil idyllic democratic utopia that some wooly headed idealists once thought it would be yet? Nearly 4 years, isn't it.

But it proves you wrong. You said: "American oil companies own most of the oil refineries around the world. Check it out".

It's indicative of how you don't proceed by analysis. You 'knew' the war was about oil as soon as it started, probably even before. I tackled you on other aspects too, again proving that, for all your posturing as an expert telling others that they don't understand the hows and whys and history of the oil trade, you haven't proceeded from facts. Why not respond to my other points?

 

As with any essentially dogmatic outlook, there is no amount of evidence that can convince you that the war was not about 'big oil'. Had the figure on ownership of refineries been 10 percent, you could, and would, still have said it shows how much weight they have.

 

Sorry to say this but the following quote from you, taken from the above post, makes me think that not only do you not draw conclusions from factual analysis but you are actually out of touch with reality. How can you straight-facedly say - "A single country owns or controls over 1 third of the world's oil refineries!!! I never thought it was as much as that. Maybe with the Brits combined, I thought it might. But not by themselves. Amazing"  - when your original claim was that the US companies "own most of the oil refineries around the world".  One moment you claim that the US owns most of the refineries, the next moment you tell us you didn't realize that they owned as much as one-third of the refineries.

 

I'm not sure whether this is Addams' Family or Twilight Zone. Probably a bit of both.

 

Bye,

 

Barry

PS - And, no, I shan't be responding to your 'genuine' question about how I think Iraq is going. Not in this thread. But I will be continuing with a critique of Greg Muttit's 'Crude Designs' document, with a view to having it criticized and commented upon on this site (with a view to possible wider publication once the new national oil law is promulgated in Iraq).

Byork: But it proves you wrong. You said: "American oil companies own most of the oil refineries around the world. Check it out".

byork,

if I said it like that, I stand corrected. But, big deal. I would have meant the five deadly sisters. Saying "America" makes my estimate off target, but Big Oil still controls a huge stake in refineries around the world.

I have read from the same source in the past as the one you provide. I had a problem with them seeming to pretend that the American oil companies only do business at home. There wasn't any allowance for the fact that about 70 percent of Exxon's revenue was from overseas activities in their profit comparison chart. Their calculations on comparative profit margins with companies like Citibank was all domestic activity. A bit of a con, as far as I could see. But since Exxon has about 7 branches in the Caymans alone (last count), I don't see how anyone could give a true indication of what they are really doing balance sheet-wise, since I 'm sure their numbers get well and truly laundered before the loot arrives stateside. If you need any links on this, I will be glad to oblige.

I must admit I was being a bit facaetious in my last post. As your figures were pretty rubbery (not you... the person who emailed you admitted it was impossible for them to give an accurate figure), I was just agreeing with you and making the point that approximately a third of the world's refineries  controlled by one country is an enormous statistic.

Really, byork. Is that all you have come up with?

It's indicative of how you don't proceed by analysis. You 'knew' the war was about oil as soon as it started, probably even before. I tackled you on other aspects too, again proving that, for all your posturing as an expert telling others that they don't understand the hows and whys and history of the oil trade, you haven't proceeded from facts. Why not respond to my other points?

 

As with any essentially dogmatic outlook, there is no amount of evidence that can convince you that the war was not about 'big oil'. Had the figure on ownership of refineries been 10 percent, you could, and would, still have said it shows how much weight they have.

 

Sorry to say this but the following quote from you, taken from the above post, makes me think that not only do you not draw conclusions from factual analysis but you are actually out of touch with reality. How can you straight-facedly say - "A single country owns or controls over 1 third of the world's oil refineries!!! I never thought it was as much as that. Maybe with the Brits combined, I thought it might. But not by themselves. Amazing"  - when your original claim was that the US companies "own most of the oil refineries around the world".  One moment you claim that the US owns most of the refineries, the next moment you tell us you didn't realize that they owned as much as one-third of the refineries.

 

I'm not sure whether this is Addams' Family or Twilight Zone. Probably a bit of both.

 

Bye,

 

Barry

PS - And, no, I shan't be responding to your 'genuine' question about how I think Iraq is going. Not in this thread. But I will be continuing with a critique of Greg Muttit's 'Crude Designs' document, with a view to having it criticized and commented upon on this site (with a view to possible wider publication once the new national oil law is promulgated in Iraq).

"if I said it like that, I stand corrected. But, big deal. I would have meant the five deadly sisters. Saying "America" makes my estimate off target".

BYORK:There are two points there: the first, that the US oil companies actually want the price of oil to increase, is mainfestly absurd. As they import the oil, it is in their interests for the price to be cheaper, not dearer.

BYORK,

US oil companies also export oil to their subsiduiary companies, and other American companies in America, who in turn distribute it throughout the country and elsewhere.

The major oil comapanies have been making stupendous, obcene profits since the crude hike that resulted from the Iraq invasion. Where have you been, man!? Its all win/win for them. As long as their President and Vice President are oil men. Which they are.

That you do not know this is amazing. If you don't know this, you don't know anything about the subject on which you are trying to lecture me. Nothing. Nada. No wonder you don't know what I'm talking about and you can't understand why I don't care about your correction.

Before you go any further, I suggest you comprehend this. The major oil companies MAKE MOST OF THEIR MONEY FROM PRODUCING OIL.... from oil wells, and not refining it and selling it once it arrives stateside. Understand that, and then we can move on to other things. Take your time to absorb this.

Exxon makes nearly three quarters of its revenue from overseas oil production (oil wells) from overseas. It makes comparitively very little importing the stuff and distributing it. Exxon made very little in importing oil from Iraq during the sanctions, as opposed to if they operated private oil wells in Iraq and onsold it to their subsiduairy companies in America.

I'll explain: BYork buys oil off Iraq for 60 dollars a barrel and uses it to make about 10 percent profit in his home country of Absurdistan. Iraq is getting it out of the ground for a buck a barrel. BYork uses his influence to get the corrupt government of Absurdistan to bomb Iraq so BYork can get his hands on the oil fields. And he does. Now BYork is IN Iraq, and paying the green-zone-puppet-government of Iraq a small royalty and getting the stuff out of the ground for himself. He is no longer paying 60 dollars a barrel. He is paying one dollar to get it out, and ten dollars (or some such royalty) to the Iraq puppet government. The rest is his. Get your calculator out. We are talking about billions every year, and control of the second largest oil deposits in the world.

You cannot argue this. Hopefully you now understand it, up until now your posts here show, you don't. Its in the major oil companies interests to have oil at a higher price and have them controlling and operating everything from the oil wells down.

BYORK: "...... that the US oil companies actually want the price of oil to increase, is mainfestly absurd. As they import the oil, it is in their interests for the price to be cheaper, not dearer."

Really? Read on.

Once again, bpors does not substantiate his claims. We cannot take his word as a self-styled expert, as he has been proven wrong previously. He stated that most of the oil refineries in the world are owned by US companies and told us to check it out. That was his substantiation: "Check it out". No source other than that. Well, I did check it out and proved him wrong. He then said that being wrong didn't matter. Now he is making other unsubstantiated claims, again as an 'expert' telling me, the person who proved him wrong previously, that I know nothing. Well, I'm through with doing his checking for him.

Even where US companies 'produce' the oil, they rarely do so on their own. This is reflected in the figure, sourced previously, that more than 70% of the world's oil resources are held by governments that limit and restrict foreign ownership. Most production in other countries is through joint ventures or Production Sharing Agreements.

I have never denied that the US oil companies are making huge profits. The profitability of the oil companies is not evidence of a motive for the war in Iraq any more than it suggests plans for an invasion of Canada, which is the US's main cource country. Bpors' claim that "US oil companies also export oil to their subsiduiary companies, and other American companies in America, who in turn distribute it throughout the country and elsewhere" is hot air, a sad attempt to seem authoritative on the part of someone who relies on guesswork.

The absurdity continues when bpors says: "Exxon made very little in importing oil from Iraq during the sanctions, as opposed to if they operated private oil wells in Iraq and onsold it to their subsiduairy companies in America". What a waste of breath. As Exxon does not operate private oil wells in Iraq, the reality is that they did very nicely out of oil imports from Iraq. Yes, bpors, hold your breath, I know what you'll say: but they are going to privately own the oil wells in the near future. This is speculation and only makes sense if you believe that Production Sharing Agreements are the same as privatization. They are not, and the difference is precisely in the fact that the government that enters into them with private overseas companies, as Saddam planned to do, and did, in the late 1990s, retain ownership of the resource. (Bpors will rightly ask for evidence here, and I will supply it as part of my critique of the 'Crude Designs' document. I'm fairly sure that bpors would not even know that the Baath regime negotiated PSAs with foreign oil companies).

As with the 'Crude Designs' document from which bpors draws his opinion on this matter, he fails at any point to identify the benefits to Iraq of oil exploitation under a Production Sharing Agreement. For him, as with the document's author, Greg Muttit, it is all one way. Thus he can say: "He is no longer paying 60 dollars a barrel. He is paying one dollar to get it out, and ten dollars (or some such royalty) to the Iraq puppet government". When I find time to post my critique of the 'Crude Designs' document, I will show that the failure to identify 'what's in it for Iraq' is an intentional ommission. When the financial benefits to Iraq are factored in, and acknowledged, it is obvious as to why Iraq will go down that path. They will make billions from oil resources that would otherwise remain worthless in the desert. 

No-one knows the shape or form the Iraqi PSAs will take. But facts do not matter to bpors and that is a starting-point to understanding why he is so frustrated and incapable of persuasive argument.

Barry

Not only does bpors want others to do the 'checking' for him, he also wants us to do his thinking. Posting an article, as bpors has above, really requires some accompanying analysis on his part. Which bits is he cherry-picking to suit an argument and, for that matter, what argument? It hardly comes as a revelation that Exxon made money from increasing production. Where does this bit from the article fit in:

In contrast, many oil-rich nations have welcomed foreign investment to help develop their natural resources. But higher crude oil prices have emboldened many of those same countries to tighten the fiscal screws on foreign companies operating within their borders, which could eventually take a bite out of Exxon's profits.  (Is this meant to be evidence of Exxon wanting higher oil prices?! Bpors posted the article but has he read it carefully?)

My point about the companies importing the oil was initially made in the context of bpors' apparent belief that the US government imported it and that, somehow, the act of importation did not involve taking the oil out of the place from whence it was imported. I know that importation is not the entire story. Bpors says, mysteriously, "The major oil companies MAKE MOST OF THEIR MONEY FROM PRODUCING OIL.... from oil wells, and not refining it and selling it once it arrives stateside". Here we learn that the big oil companies make most of their money just from the act of production - they need not refine or sell the oil. Yes, bpors, I'm quoting you. You said "not refining it and selling it".

Lower prices are advantageous to companies like Exxon and government-owned oil companies, as in Saudi Arabia, because lower prices increase consumption. They can sell more at a lower price or sell less at a higher price. The law of supply and demand doesn't allow them to do both: maximize price and consumption. US consumption, with Chinese consumption following, determine price even more than 'regulatory' bodies like OPEC these days.

Of course the oil companies are motviated by profit - they are not charitable institutions. The US oil industry has a profit margin, over all, of about 11 cents per dollar of sales. This isn't huge compared to banking or pharmaceuticals (33%) or Microsoft (32%). The record profits of 'big oil' reflect volume of sales. If sales amount to a hundred billion dollars, then 11 billion dollars in absolute profit is made. And it required 89 billion dollars to be spent by the companies to generate that profit. In the case of overseas operations, the 89 billion is spent on exploration, development, maintenance, and infrastrucutre (and where necessary, as in Iraq, on repair).

As for the oil company producers making the biggest profits on oil they own, this is axiomatic. But, bpors presumes that the companies own all the oil in the 'concessions' they exploit. His thinking is rooted in another, distant, colonial era. He is like Peter Rugg, the missing man. The new reality since the decolonization after World War Two is that the oil producing countries generally own their own resources. They invite foreign investment to help develop them, and to do this have turned, in many cases, to Production Sharing Agreements (PSAs). A 50-50 sharing agreement between, say, Exxon and the Iraqi national oil company, after costs (exploration and development are usually covered by the foreign company in PSAs and are very expensive, often billions), only 50% of the oil ends up actually owned by the partners. If the foreign company has a 10% stake, then they "own" 10% of 50% - which is 5%.

As stated in a previous posting, nobody knows what terms will be negotiated by the Iraqi government. Its strength is that it owns the resource and that 'big oil' generally wants to increase supply. Its weakness is that the internal security situation is so dire, due to the insurgents, jihadis and militia, that it can be 'beaten down' in any PSA negotiations. But the bigger problem, I think, is that 'big oil' will not take the risk of new investment under current circumstances. This is why the exact opposite of bpors' outlook is required, namely: the anti-democratic forces who are disrupting supply and sabotaging infrastructure need to be defeated rather than supported. Bpors persists in calling the democratically-elected Iraqi government a 'puppet government'. His ignorance is astounding. Does he really think that the Supreme Council for Islamic Revolution in Iraq and the Islamic Call (Dawa) Party, which dominate the main alliance within the National Assembly, are US puppets?! If it wasn't all so serious, I'd be laughing.

I doubt whether I'll respond again to bpors. I really want to get on with an article for possible wider publication, based on a response to Greg Muttit's 'Crude Designs'.

Barry

BYORK: "...... that the US oil companies actually want the price of oil to increase, is mainfestly absurd. As they import the oil, it is in their interests for the price to be cheaper, not dearer."

 

Byork,

your amazing ignorance of who does what in the oil world would make anyone look like on expert on the oil business. Don't deny it. Its patently obvious you did not know these companies actually extracted the stuff and made most of their loot doing this. You thought they only imported it. Ha ha! No wonder you can't figure out why Iraq was invaded.  Making the claim that it isn't in the interests of  the U.S. (I will add Shell and BP to that) oil companies for there to be a high oil price is hilarious.

It isn't in their interests to allow Iraq, China, India, and Russia to develop Iraq's oil fields. You would be right if you said that. And that is why Iraq was invaded.

Perhaps you should attend to your own pitiful knowledge base before you start taking swipes at others.

To think, BYork didn't even know Exxon, Chevron etc major profit revenue was in OIL PRODUCTION, NOT IMPORTING THE STUFF. Hardy har har.

I have an idea: Why don't you back up your absurd claims, like Saddam being  a "US man".

And why don't you explain how when you quote this,

"About 77 percent of the world's 1.1 trillion barrels in proven oil reserves is controlled by governments that significantly restrict access to international companies, according to PFC Energy, an industry consulting firm in Washington."

the significance of what is said  with regard to the invasion and forced occupation of oil rich Iraq completely passes you by.

But more importantly, I would like to here your tale about how Saddam is a 'US man'.

After all, this is your thread, and you should back up your claims before insisting on others to back up their's.

Tell us about Saddam, the US man, friend to Mobil and Chevron.

Bpors ignored the points in my previous post and just rehashes views that he has posted previously and which I have replied to. Saddam as a US man was dealt with in a previous post. Bpors failed to counter my evidence, left it alone for long enough for people to forget, and now just comes back in, unable to effectively refute the evidence, but attempting to start the debate all over again. No way! There's a democratic revolution to support!!

Readers who have followed the thread closely will see how bpors has misrepresented me and will recognize the points to which he has been unable to respond.

Barry

The new Iraqi national oil law is still being drafted by a committee comprising representatives of Kurds, Sunnis and Shiites and is supposed to be presented to parliament this month. The latest news on this important development (in reports of a few days ago) is that the committee has agreed that oil revenues will be collected by the cenbtral government and redistributed to provinces and regions by population. http://www.iht.com/articles/2006/12/14/news/iraq.php?page=1 This would mean that 20% of the nation's oil revenues would go to the Sunnis (who reside in areas with very little oil wealth). This, in turn, will draw them into the political process in greater numbers, as they will want to defend the constitution on which the new law must be based. Of course, there will still be some Sunni rejectionists, because under the Baath regime oil revenues were used corruptly to favour the tiny ruling elite which exploited sectarian divisions.

The new law will also open the way for the development of about 60 new fields in Iraq by foreign companies. The 20 fields currently in operation will remain owned by the Iraqi National Oil Company; though it will certainly continue to need foreign assistance in light of 25 years of disruption through war, corruption, mismanagement and sanctions. The current Oil Minister, Hussain al-Shahristani, is a nuclear scientist who did ten years in Abu Ghraib when he objected to the Baath regime's nuclear weapons programme. Wiki describes him as "an independent member of the United Iraqi Alliance".  http://en.wikipedia.org/wiki/Hussain_Shahristani  (The UIA received about 48% of the vote in the Iraqi federal elections and is main coalition in the Iraqi parliament).

Other information about the drafting of the new law is that the committee will recommend the establishment of a Federal Oil and Gas Council, which will have the authority to approve new contracts. My feeling is that the new law will allow for regional autonomy in the initial negotiating of contracts but final approval will rest with the central government through this Council. The Oil and Gas Council will also review the situation in regards to the contracts already negotiated by the previous regime (mainly involving French, Chinese and Russian 'big oil'). Should these contracts, which are huge, be honoured or repudiated? (Anyone know of how previous revolutionary change-overs dealt with this issue? The Bolsheviks, for instance?).

(I was also going to link to a New York Times article on this but, having saved it as a favourite, I now find that one needs to register to read it).

From the above, it seems, so far, to be good news for Iraq. The new oil law has the potential to help greatly in national reconciliation while expanding Iraq's oil production capacities and increasing much-needed revenue. The 'usual suspects' will make a fuss about it but I can't see them mobilizing any significant numbers in the street on this issue, which is so clearly in the interests of the Iraqi people, any more than they have been able to mobilize significant numbers since the Iraqis voted in their millions in two federal elections. Expect a lot of frustration from them, though, and a lot of misinformation too.

Barry

Anyone know of how previous revolutionary change-overs dealt with this issue? The Bolsheviks, for instance?

Bolshevik Production Share Agreements retained 30% to 40% for oil, with big oil taking the rest.

Lenin Report on Concessions at a Meeting of the Communist Group Of The All-Russia Central Council of Trade Unions April 11, 1921

Lenin strongly supported such foreign exploitation of Russia's resources, as it was the best, most practicable, way of improving the economic position. From the 'Report on Concessions' made by Lenin in 1921 (posted by Arthur - thank you very much for that!), Lenin says:

Some Baku comrades resented the idea that Baku too—or, perhaps, specifically—is to have concessions, and that it is desirable to lease out a major part of its oilfields. Their arguments were highly diverse, and ranged from references to their own "exploration", which could be done without any foreigners, to assertions that the old workers, who spent a lifetime fighting the capitalists, refuse to be saddled with their yoke once again, etc.

I am not going to say offhand how much of these arguments was based on general principles and how much on Baku "patriotism" and localism. Let me say for my part that I have opposed this view most vigorously in the belief that if we do not manage to conduct a concessions policy and attract foreign capital to our concessions, we can hardly consider any serious practical measures to improve our economic position. We cannot seriously entertain the idea of an immediate improvement of the economic situation, unless we operate a policy of concessions, unless we discard our prejudices, our local patriotism, discard to some extent our craft patriotism, and to some extent the idea that we can do our own "exploring". We must be prepared for inconveniences, hardships and sacrifices; we must be ready to break our habits and possibly our addictions as well, for the sole purpose of working a marked change and improvement in the economic state of the key industries. This must be done at all costs.

And, as Arthur indicated, Lenin described the actual terms of the concessions:

There is the question of actual terms. For oil agreements, they are as follows: from one-quarter to one-third of the whole of Grozny and of the whole of Baku. We have worked out our share of the output: we shall be retaining from 30 to 40 per cent of the oil extracted. We have inserted a commitment to increase output within a certain period to, say, 100 million, and another commitment to extend the oil pipeline from Grozny and Petrovsk to Moscow. Whether we shall have to make any extra payments is to be stipulated in each agreement.

Lenin concludes:

We shall not grudge the foreign capitalist even a 2,000 per cent profit, provided we improve the condition of the workers and peasants. It is imperative that we do it.

Also of relevance to this thread is an article by Mark A. Stoleson on Russia's current Production Sharing Agrement law (Russia today is an example of how to stuff it up). Anyway, the author offers a brief look at the origins of such agreements with foreign companies in Russia and points out how, Russia has turned to foreign investment twice this century to boost sagging domestic oil production. In 1921 Lenin was able to attract sufficient foreign capital to salvage Russia's oil industry which had experienced a decline in production by fifty percent in the preceding four years. With the help of foreign capital and expertise, oil production in Russia was restored to its pre-war level by 1928.

Barry

BYORK:Saddam as a US man was dealt with in a previous post.

Byork,

I was not ignoring your previous posts. I am trying to tie you down and prove a claim you have made. There was "no evidence" to counter.

Your link that you are talking about was about Saddam, and it dealt with Saddam as a young thug trying to assassinate a more radical anti-American Iraqi leader than even the group Saddam was from. And of course, there is the sleazy CIA you support, in the thick of it trying to curry favour with the young turks. And then of course - much later - there was Reagan and Bush Snr doing everything they could to get into Iraq during the 80's, glad-handing Saddam and pretending to give him everything he wanted. But they never succeeded; they never got back into Iraq. And to make matters worse, Saddam even invaded Kuwait, where - unlike Iraq - American oil companies operated: Exxon, Chevron, Conoco, and all that. Hardly a "US man".

And BTW,  Saddam's mob was nationalistic and anti American enough to kick out the American and British IPC consortium in June 1972. And at about the same time Saddam himself was in the Soviet Union drumming up investment. Hardly the act of a "US man". Neither was his long refusal to allow the Americans back in privately owning Iraq's oil wealth again like they used to, but while doing backdoor deals on weapons of mass destruction. But he wasn't the only one doing deals with America, as the Contra/Iran arms deals caper shows.

And only a complete moron would leap to the conclusion that because of the CIA supplying Ayatollah Khomeini's Iran with weapons, then Ayatollah Khomeini must be a "US man" too!!!!

BYork, you can't back up your claim that Saddam was a "US man". Its a huge claim and flies in the face of everything that is public knowledge for the past 30 years.  And if you can't do it, then how can you be taken seriously?