Tuesday, November 22, 2005
"Crude Designs": New Report Charges Big Oil "Rip-Off" of Iraq
Interviews Available
GREG MUTTITT, 011-44-20-7403-3738, mobile: 011-44-797-058-9611, greg.muttitt at pobox.com, http://www.CrudeDesigns.org
The British group PLATFORM has just released a report: "Crude Designs: The Rip-Off of Iraq's Oil Wealth." Among the group's findings:
* "Current Iraqi oil policy will allocate the development of at least 64 percent of Iraq's reserves to foreign oil companies."
* "The estimated cost to Iraq over the life of the new oil contracts is $74 to $194 billion, compared with leaving oil development in public hands."
* "The contracts would guarantee massive profits to foreign companies, with rates of return of 42 to 162 percent. The kinds of contracts that will provide these returns are known as production sharing agreements (PSAs). PSAs have been heavily promoted by the U.S. government and oil majors and have the backing of senior figures in the Iraqi Oil Ministry. However PSAs last for 25-40 years, are usually secret and prevent governments from later altering the terms of the contract."
"Crude Designs" author and lead researcher, Greg Muttitt, said today: "The form of contracts being promoted is the most expensive and undemocratic option available. Iraq's oil should be for the benefit of the Iraqi people, not foreign oil companies."
He continued: "The new Iraqi constitution opened the way for much greater foreign involvement in Iraq's oilfields. Negotiations with oil companies are already underway, ahead of elections in December and prior to the passing of a new Petroleum Law. This report calls for full and open debate in Iraq about the way oil resources are to be developed, not 30-year deals negotiated behind closed doors."
Muttitt added: "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."