Analysis: Iraq oil union has storied past
By BEN LANDO, UPI Energy Correspondent
WASHINGTON, March 29 (UPI) — Hassan Jumaa Awad wants Iraq’s oil to stay under state control, and the unionists, who have long worked the rigs, to be supported in developing the national resource. But this is no request from the president of the Iraqi Federation of Oil Unions.
It’s a demand.
“Since we are working to make progress in production, we need a real participation in all the laws that are related to the oil policy,” Awad told United Press International, speaking on his mobile phone from the southern port city of Basra. “We are the sons of this sector and we have the management and technical capability and we have the knowledge on all the oil fields.”
The IFOU represents more than 26,000 workers organized under various unions in the oil-rich southern and northern areas of Iraq. Shiites, Sunnis and Kurds, together they’ve operated Iraq’s oil sector before, during and after Saddam Hussein. Their rights to officially unionize are still denied under a 1978 Saddam law, one of a few of the former president’s laws the U.S. occupation and the Iraqi Parliament upheld.
Iraq’s oil production is still around 2 million barrels per day, down from the 2.6 million bpd before the war, but far below its potential since most of its 115 billion barrels of reserves are untapped. Investment in the world’s third-largest oil market is hampered by conditions past and present, and an unknown future.
Saddam pushed certain oilfields too hard while neglecting maintenance and new technologies. The sector was hit with war starting in 2003, and now regular sabotage and a shortage of electricity.
Kurdish and central government negotiators reached a deal last month on the framework for a law governing Iraq’s oil. Details on ownership rights and revenue sharing are still far from finalized. The Iraq National Oil Co. would restart but compete with foreign oil companies, who could win contracts giving them partial ownership of the respective fields.
INOC “should have full privileges,” Awad said, “and we don’t agree on the production partnership.”
Iraq’s oil has been nationalized for four decades. Iraqis view it with a pride of ownership, something the law would reduce if the contract language allowing for foreign ownership stands.
“We think that to reserve sovereignty of Iraq is to be able to control the oil wealth,” Awad said, and foreign investment should be limited to technical assistance. “I wish if the foreign companies were to come into Iraq, that they help us,” Awad said. “Not to suck the blood of the Iraqi people.”
The unions were kept in the dark, as were most members of Iraq’s parliament, until the draft law was leaked to the media. Even then it was still out the reach of most of Iraq’s citizens.
“The discussion over the oil law was held very tightly between the Bush administration and key representatives of the most influential parts of Iraq’s decision making authority,” said Antonia Juhasz, an analyst with Oil Change International and author of “The Bush Agenda: Invading the World, One Economy at a Time.”
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