US-Orchestrated Iraqi Oil Bill Stalled
What the Times mentions no where in its report is this: the United States orchestrated the law. According to The (London) Guardian, it would open up the oil fields to foreign corporations -- oil fields which were nationalized (ie, put off-limits to foreigners) in 1972. Moreover, the law would remove contract authority from the the Parliament and place it in the hands of an unelected board consisting of oil industry executives.
Don't expect to read any of these details in the US press: I've found them only in the British press. However, Walter Pincus reported on Monday that the Commerce Department is looking for an expert to help "the U.S. Department of Commerce [provide] technical assistance to Iraq to create a legal and tax environment conducive to domestic and foreign investment in Iraq's key economic sectors, starting with the mineral resources sector." (tip)
Here's more background on the law from The Guardian, in an excerpt from Naomi Klein's new book (emphasis added, buy the book):
In December 2006, the bipartisan Iraq Study Group fronted by James Baker issued its long-awaited report. It called for the US to "assist Iraqi leaders to reorganise the national oil industry as a commercial enterprise" and to "encourage investment in Iraq's oil sector by the international community and by international energy companies."
Most of the Iraq Study Group's recommendations were ignored by the White House, but not this one: the Bush administration immediately pushed ahead by helping to draft a radical new oil law for Iraq, which would allow companies such as Shell and BP to sign 30-year contracts in which they could keep a large share of Iraq's oil profits, amounting to tens or even hundreds of billions of dollars - unheard of in countries with as much easily accessible oil as Iraq, and a sentence to perpetual poverty in a country where 95% of government revenues come from oil. This was a proposal so wildly unpopular that even Bremer had not dared make it in the first year of occupation. Yet it was coming up now, thanks to deepening chaos. Explaining why it was justified for such a large percentage of the profits to leave Iraq, the oil companies cited the security risks. In other words, it was the disaster that made the proposed radical law possible.
[...]
The law that was finally adopted by Iraq's cabinet in February 2007 was even worse than anticipated: it placed no limits on the amount of profits that foreign companies can take from the country and placed no specific requirements about how much or little foreign investors would partner with Iraqi companies or hire Iraqis to work in the oil fields.
Most brazenly, it excluded Iraq's elected parliamentarians from having any say in the terms for future oil contracts. Instead, it created a new body, the Federal Oil and Gas Council, which, according to the New York Times, would be advised by "a panel of oil experts from inside and outside Iraq". This unelected body, advised by unspecified foreigners, would have ultimate decision-making power on all oil matters, with the full authority to decide which contracts Iraq did and did not sign. In effect, the law called for Iraq's publicly owned oil reserves, the country's main source of revenues, to be exempted from democratic control and run instead by a powerful, wealthy oil dictatorship, which would exist alongside Iraq's broken and ineffective government.
Iraq has the third largest reserves of oil in the world -- and the major oil companies have wanted to get their paws on this resource for years. The Financial Times reported in 2005 that major international oil companies had been implicated Volker's review of the oil-for-food program.
See Congressional Spending Bill Targets Iraqi Oil, Congress Ties Iraq Deadline To Funding; Bill Endorses US-Drafted Iraqi Oil Legislation, Why Bush Should Veto The Iraq War Budget and Attacks On Iraqi Oil and Gas Pipelines.