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An NGO report says oil majors
are exploiting Iraq's instability |
Up to $113 billion in Iraqi oil revenues are going to multinational
oil companies under long-term contracts, and not to the Iraqi people, says a
social and environmental group.
In a report, the group known as Platform said that oil multinationals would
be paid between 74 billion pounds ($43 billion) and 194 billion pounds, with
rates of return of between 42% and 162% under proposed production-sharing agreements,
or PSAs.
"The form of contracts being promoted is the most expensive and undemocratic
option available," said Platform researcher Greg Muttitt on Tuesday.
"Iraq's oil should be for the benefit of the Iraqi people, not foreign
oil companies."
New and weak
Muttitt added: "Iraq's institutions are new and weak. Experience in other
countries shows that oil companies generally get the upper hand in PSA negotiations
with governments.
"The companies will inevitably use Iraq's current instability to push
for highly advantageous terms and lock Iraq to those terms for decades."
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Frequent attacks are taking their toll on Iraq's oil infrastructure |
The report, titled Crude Designs: The Rip-Off of Iraq's Oil Wealth, said the majority
of Iraqis were against the large-scale involvement of foreign companies in the
post-Saddam era.
"Iraqi public opinion is strongly opposed to handing control over oil
development to foreign companies," it said.
"But with the active involvement of the US and British governments, a
group of powerful Iraqi politicians and technocrats is pushing for a system
of long-term contracts with foreign oil companies which will be beyond the reach
of Iraqi courts, public scrutiny or democratic control."
Profits and plunder
Under PSAs, foreign companies provide capital investment, including drilling
and the construction of infrastructure, and a proportion of oil extracted is
allocated to the companies.
But Platform's report alleged that financing oil development could be done instead
through government budgetary expenditure, using future oil flows as collateral
to borrow money, or using international oil companies through shorter-term and
less lucrative contracts.
Louise Richards, chief executive of aid charity War on Want, said: "People
have increasingly come to realise that the Iraq war was about oil, profits and
plunder."
"Iraq's oil profits, far from being used to alleviate some of the suffering
the Iraqi people now face, are well within the sights of the oil multinationals."
