On 13 October the Iraqi government, at a meeting in London with bosses of 34 international oil companies, opened an auction for 20-year contracts to develop big swathes of Iraqi oil and gas fields.
Bids will be submitted over the coming months, and the Iraqi government plans to award contracts in mid 2009. It will also open a second bidding round, on further oil and gas fields, in December 2008.
We don’t know the terms of the contracts. More to the point, neither do the peoples of Iraq.
The deep-rooted opposition in Iraq to oil privatisation, spearheaded by the oil workers’ unions, has had an impact. The Iraqi government has long been trying, under US pressure, to push through a comprehensive new oil law, allowing for large-scale privatisation. The law will not pass any time soon. The Iraqi government is resorting to makeshifts under existing law; the question is, how much of the radical privatisation programme will it try to sneak through via the makeshifts.
“Hands Off Iraqi Oil” reports: “According to the Ministry’s claims, [these] are service contracts. If that is true, they would be comparable at least to contracts in Venezuela and Iran, rather than giving such a large share of ownership, control and revenues as the production sharing contracts the companies wanted; but still giving away more than in Saudi Arabia and Kuwait, where foreign companies do not manage a whole field, but are just contracted to install a piece of technology, for example...
“It is hard to say [however] because so far there has been absolutely no transparency, and no-one knows what the terms of the contracts are. The priority now in Iraq has to be for these terms to be disclosed — the issues are too important to be decided in secret”.
With the auction, the Baghdad government is giving another signal of the increasing confidence it has shown in recent months. Presumably at least some of the oil company bosses buy into that confidence — they wouldn’t bid for contracts with the Maliki government unless they thought it likely to last a while.
This is a government which keeps Saddam Hussein’s anti-union laws in place; which keeps Decree 8750 from 2005, authorising the government to seize all union funds; and which responded to an oil workers’ strike in June 2007 by sending in troops and threatening to arrest union leaders.
It is a coalition government of Shia clerical-fascists of various sorts, Kurdish warlord parties, and minor Sunni Islamist groups. It was elected, but elected on a communal head-count in conditions of simmering communal civil war.
The right to self-determination for the peoples of Iraq must mean the right to decide freely on the development of the country’s major natural resource, and the right to have a democratic constitution, with a labour law guaranteeing trade union rights.
The Maliki government is taking a harder line with the USA. After rejecting the “State of Forces Agreement” that the USA wanted, it is still toughing out negotiations over a temporary “security agreement” for US troops to remain after their UN mandate expires on 31 December 2008.
But being tougher against the USA could go with being “tougher” against Iraqi workers, and “tougher” about contracting-out Iraq’s natural resources.
It remains very possible that the newly confident Maliki government will overreach itself. On 1 October it took over control of 100,000 members of the Sahwa militias, Sunni militias enticed away from the “resistance” by the Americans by long negotiations.
Until 1 October the Sahwa militiamen were paid $300 a month, a good wage by Iraqi standards, by the USA. Now the Iraqi government is due to pay them a comparable stipend, but integrate only 20% of them into the army and police. The others have been promised other government jobs, or training for a trade. But the Maliki government also says it may prosecute some Sahwa leaders for alleged sectarian crimes. A blow-up between these Sunni militiamen and the Shia-dominated government could plunge Iraq back into open communal civil war.
A democratic, secular movement from below, spearheaded by the Iraqi labour movement, is needed to bring real self-determination to the peoples of Iraq, free from foreign troops, sectarian militias, and profit-gouging by multinationals.