A draft law being considered by the Iraqi parliament would enable US companies to take control of Iraq's oil industry, oil experts in the country say.
The proposed bill, approved by the Iraqi government in February after months of wrangling, opens the country's oil sector to foreign investors 35 years after it was nationalised.
"The law is designed for the benefit of US oil companies," Ramzy Salman, an Iraqi economist who worked for the Iraqi oil ministry for 30 years, said.
"If approved, it would take things back to where they were before the nationalisation of
But he said the situation would be reversed when Iraqis regained their "true sovereignty".
Salman said: "If there is something that should be worked on, it is the [Iraqi] constitution.
"The constitution contains serious gaps in terms of who is in charge of the oil and its revenues ... [despite the] oil in Iraq being under every Iraqi river, desert, marsh and farm."
The new law, if approved, would authorise production share agreements (PSAs), which offer huge profits for foreign oil companies.
PSAs are normally ideal for poorer countries exploring virgin lands or wanting to extract oil from fields where the resource is well below the surface and are designed to protect investors from the risks involved in such exploration projects.
But Iraqi oil experts say investors face virtually no risk, as
He said: "An oil barrel in most of
"In the 1990s, the government of Saddam Hussein gave PSAs to Russian and Chinese oil companies, but it was more of a political decision than economic," al-Chalabi said.
He said the contracted Russian and Chinese oil companies were mostly government-owned.
The 12.5 per cent profit protected by the new law is also disputed by many as being too low.
Al-Chalabi said the percentage was excessive given current oil prices.
Break-up of Iraq
Observers say that if the new law is approved, it will also encourage separatists in the oil-rich provinces to split off.
Eventually the break-up of
Iraq's constitution allows governorates to form a semi-independent regions, which enjoy full rights in controlling natural resources.
Dhafir al-Ani, an Iraqi member of parliament, said: "The proposed oil law is the best possible in the current situation.
"However, if there are some gaps in it, then the reason is the constitution, which contains several controversial issues and needs to reconsidered."
"Under no circumstances would
Muhammad Bahr al-Ullom, who laid the early foundations of the current draft oil law when he served as Iraq's first post-war oil minsiter in 2004, has told reporters that he is in favour of the new law. He said it would not put Iraq's oil at the hands of foreign oil companies and it would not devide Iraq.
Al Jazeera.net contacted Bahr al-Uloom in Iraq and agreed with him to call a few hours later for a telephone interview. However, there was no answer to a telephone call at the appointed time or when subsequent attempts to reach him were made.
Kurds and the new law
Ashti Hawrami, oil minister for the Iraqi Kurdish region, said at the Dubai conference that the Kurds would reject any ammendments to the suggested law and that they would go ahead with deals they have already made, whether the law was approved or not.
Al-Ani agreed with Salman that the proposed law was a "political" deal to strengthen US allies in Iraq.
"I prefer we go home. We have increasing signs that the law is a political deal."
|Source: Al Jazeera and agencies|
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