Analysis: At odds with U.S. over Iraq oil

WASHINGTON, May 31 (UPI) -- As the Bush administration and Congress press Baghdad to pass an oil law, a parliamentarian visiting Washington wants them to back off the legislation viewed by many to be too friendly to oil companies and detrimental to Iraq.

"The people as well as all the members of Parliament believe that this law is not only for robbing Iraq of its oil wealth but also for the division of Iraq," said Mohammed al-Dynee, a member of the Iraqi Front for National Dialogue's contingent in the Parliament. He spoke to United Press International via a translator from Amman, Jordan, where he has meetings after spending 25 days in Washington.

President Bush has called for the passage of an oil law that equitably redistributes revenue from Iraq's oil sales back to its people. The Democrats in Congress adopted this as a benchmark they will hold Bush to, including it in the supplemental Iraq war spending bill approved last week.

"There is an awakening amongst Iraqi people as well as members of Parliament that this law is against our interest," Dynee said.

The law is stuck in negotiations, mostly over a vaguely worded 2005 constitution that each side interprets differently. Kurds, in the north, want more of a free-market system and strong regional say in how the oil is developed, as well as an automatic mechanism for redistributing revenue. Sunnis and most Shiites want strong central control over the oil. The oil unions are threatening to strike if foreign companies have too much access to or any control over the oil. A group of 61 Iraqi oil experts wrote a letter to the prime minister urging the law be held until conditions improve and to allow further debate.

Dynee said the proposed law has not been sent to the Parliament yet because of the opposition to it. "I will certainly vote against it," he said, "and so will my party as well as a very large group of parliamentarians."

The Iraqi Front for National Dialogue is a Sunni group but describes itself as a non-sectarian coalition. The coalition has 11 seats in Iraq's 275-seat Parliament, making it the fifth-largest group.

Dynee said he's "absolutely sure we will have a majority to defeat it because the opposition is from all parties. At one point, we all thought this law was a good law, that it would do good for the Iraqi people."

Now, he said, there is a fear that it will open up Iraq's vast reserves -- the third-largest in the world -- to foreign oil companies that will be able to sign contracts controlling the respective fields for up to 30 years. He also said the law, by giving power to regions, would end up splintering the country.

"People have started understanding that at first they believed that America had come to give them freedom and democracy," Dynee said, "and they have now started to understand that America did not come at all for that; they came for the oil, and the best proof of that is this oil law."

Iraq's oil law had been drafted and negotiated behind closed doors. This lack of transparency become fodder for opponents and has bolstered the claim it was Americans and oil companies who wrote the initial draft.

Among their evidence: U.S. Vice President Dick Cheney's energy task force in 2001, which included a wish list for privatizing Iraq's oil; a pre-war working group of the U.S. State Department that focused on Iraq's oil sector; the U.S. Agency for International Development's contract with McLean, Va.-based consultant BearingPoint for "broad economic reform" of Iraq, including the oil sector; and a meeting organized by the U.S. Energy Department last year in Washington between the oil minister and the heads of oil companies.

And now, the insistence by Washington -- including pressure by former U.S. Ambassador to Iraq Zalmay Khalilzad and during visits by Cheney and Defense Secretary Robert Gates, as well as the benchmark -- to put a law on the books.

"All Iraqis seem to agree that the oil industry needs investment and it needs foreign expertise to improve that, to make that possible," said Paul Hilder, the London-based campaign director for Avaaz, a global online advocacy community. "The questions is how can that be done in such a way that the Iraqi people, who have been really the fall guys in this whole process, the victims of the last four years if not longer, how can they get the best deal out of this?"

Avaaz is collecting 100,000 signatures to a petition against the oil law, which Hilder said will be presented to Iraq's Parliament by three members -- a Sunni, a Shiite and a Kurd.

Dynee said he spent time in Washington talking to members of Congress and the anti-war movement. "If you want more chaos in the area, then you should back this plan and see what happens to your troops," Dynee said he told Congress, referring to Iraqi opposition to the law.

According to the weblog of University of Michigan Iraq expert Juan Cole, Sawt al-Iraq reported in Arabic this week "Husain al-Falluji of the Iraqi Accord Front (Sunni fundamentalist) said Friday that the IAF would never approve the new petroleum law until the constitution is first amended. He said that the party has made a firm decision in this regard."

"The oil law itself, it's just a step," said Saad Rahim, manager in the country strategies group at analyst PFC Energy. "Even getting oil out of the ground is just a step. And if you look at oil has never solved anyone's problems, producer country's problems. It's really a question of how do you move beyond that.

"I don't think it changes anyone's mind who already thought that the war was about oil. I don't personally believe that it was. I think it was about political change and things like that," Rahim said. "But it is inevitably, inexorably tied to oil, because of the nature of the country. It's hard to take that apart and depoliticize the oil issue. I keep coming back to this idea that just simply pushing oil for oil's sake is no good."

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