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From The Socialist newspaper, 11 January 2007


The war for oil profits

AS WE go to press, President Bush is due to tell the US Congress his plans for Iraq. Nearly four years after the war started in 2003, and despite 3,000 American troops, over 100 British troops and 650,000 Iraqis dying, and with daily sectarian attacks on Iraqi civilians, Bush is now recommending sending thousands more troops in.

Roger Shrives

Bush faces a more hostile audience in Congress after November's election gave the Democrats a majority. But will the Democrats - as much a party of capitalism as Bush's Republicans - question in whose interests this war is being fought?

Most capitalist politicians deny that the invasion and occupation of Iraq had anything to do with gaining control of that country's colossal oil reserves - the third largest in the world. However, the Independent on Sunday outlines a controversial law coming before the Iraq parliament shortly.

This could see foreign oil interests operating in the country for the first time since Iraq nationalised the industry in 1972. An early draft of the law, understood not to have been greatly changed so far, would offer oil companies vastly better terms than the industry norm.

Production-sharing agreements (PSAs) would allow companies to sign 30-year contracts for extracting Iraqi oil. Under PSAs, the state retains legal ownership of its oil but has to give a share of the profits to companies that invest in infrastructure and in operating wells, pipelines and refineries.

This draft law allows oil companies to recoup between 60% and 70% of revenue until initial costs are recovered, compared to the 40% 'normal'. After initial costs are met, oil firms could keep up to 20% of profits, rather than the more usual 10%.

But industry experts also say that oil giants would not descend immediately on Iraq. They would rather wait for the country to become more stable, leaving the short-term risk to "small, maverick producers." Several major oil companies have sent teams into Iraq to lobby for deals ahead of the law but the big names are unlikely to invest unless the violence, resulting from Bush's war and occupation, declines.

An oil company director said: "They are reasonable rates of return and take account of the bad security situation in Iraq. The government... has got to come up with terms good enough to attract companies."

Meanwhile, Iraq's trade union leaders warn that the Iraqi people will refuse to let the future of their oil be decided behind closed doors. Oil trade unions in particular need to take action to stop this carving up of the wealth that they have helped to create.

Together with the rural poor, they should start building a strong non-sectarian movement of workers against the occupation. They should fight for a government of their own representatives to act in the interests of Iraq's workers and poor rather than those of the capitalist class in the West and within Iraq.

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In The Socialist 11 January 2007:

Sri Lankan government blamed for violent attack on ant-war rally organiers

Labour to savage NHS jobs

Union action can defend the NHS

Manchester NHS: "Making it better" means making it worse

Socialist Students

Students fight for free education

How to become a fees fighter

ISR and Socialist Students' conference - a political voice for young people

Socialist Party news and analysis

The war for oil profits

Murderous raid on anti-war meeting

Ruthless Ruth Kelly

Violence against women

Ipswich murders lift lid on violence against women

Socialist Party review

Pirates of the Caribbean

International socialist news and analysis

Ethiopia invasion throws Somalia further into crisis

The Lagos oil pipeline tragedy was avoidable

Northern Ireland: New governing executive looks in doubt

Socialist Party workplace news

Time for action on pensions!

Vote 'yes' in PCS ballot

Construction boom - workers organise

We want our buses back!

Public transport and private ownership don't mix


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