"Victory" in Iraq, Phase II

This Monday, Prime Minister Nuri al-Maliki's cabinet in Baghdad approved the draft of the new Iraqi oil law, which places Iraq's immense oil reserves--115 billion barrels of proven reserves, third in the world after Saudi Arabia and Iran--under the control of a "Federal Oil and Gas Council." Guess who is a major player on the council? A panel of oil experts from inside and outside Iraq. The experts from "outside Iraq" are, of course, predominantly US Big Oil executives. As Pepe Escobar of Asia Times writes, "[t]he law represents no less than institutionalized raping and pillaging of Iraq's oil wealth...Sixty-five of Iraq's roughly 80 oilfields already known will be offered for Big Oil to exploit. As if this were not enough, the law reduces in practice the role of Baghdad to a minimum."

Big Oil - including not only ExxonMobil, but also ConocoPhillips, Chevron, BP and Shell now have what they want -- the denationalization of the Iraqi oil industry and establishment of "production sharing agreements"(PSAs), which are expected to deliver profit rates of up to 75%. Consider this -- Iraqi oil costs 1$ per barrel to extract; have you checked current per barrel prices lately? Not a bad spread.

In addition, Iraq has as many as 70 undeveloped fields, of which various "small" ones hold a minimum of a billion barrels. Furthermore, as desert western Iraq has not even been exploited, reserves may reach 300 billion barrels - way more than Saudi Arabia.

Phase I for "Victory in Iraq" was regime change. That obviously has been achieved. Phase II was establishment of a legal framework under which to bring Iraqi oil to the world market under the direction and control of Big Oil, with -- and this is important -- the US oil majors being the dominant faction. Phase III is the crushing of all resistance--and accomplishing this is "the trick.' As Mr. Escobar writes, "[t]he Sunni Arab muqawama (resistance) certainly has other ideas - as in future rolling thunder against pipelines, refineries and Western personnel. Iraq's oil independence will not go down quietly - at least among Sunnis. On the same day the oil law was being approved, a powerful bomb at the Ministry of Municipalities killed at least 12 people and injured 42, including Vice President Adel Abdul Mahdi. Mahdi has always been a feverish supporter of the oil law."

No matter what the presidential candidates of either party say publicly, we can expect American troops to be active in Iraq for some time to come, as Phase III demands it. As blood and treasure, time and talent, are expended in Iraq, we must ask, who reaps the spoils of "victory?"