The Hydrocarbon Law

A ‘hydrocarbon law’ is presently being discussed by senior Iraqi government officials before submission to the Iraqi parliament for approval, possibly in a few months’ time. The law has to do particularly with exploration and development of new fields. Present fields are to be administered by the federal government, in accordance with article 112 of Iraq’s 2006 constitution (see www.washingtoninstitute.org).

The concern is that control of Iraq’s oil will pass into the hands of foreign companies via generous production-sharing agreements. Huge oil reserves as yet untapped are the target of the new proposed law. So far US oil companies have only been able to market Iraq’s oil, but with the new proposed legislation they will be given 20-year contracts to explore and produce oil.

President Bush has declared that the passage of the Iraq oil law is a necessary benchmark for the Iraq government, and Congress has backed Bush by passing legislation in May requiring the Iraq parliament to pass the oil law as a condition of continued reconstruction aid.

Apologists for the measure claim it is a necessary way for Iraq to pay for the damage caused by the invasion of the country.

Interestingly, Alan Greenspan, former director of the U S central bank and Republican establishment figure, has further embarrassed the Bush administration by declaring that the Iraq war was really all about control of oil.