Returning to a Theme – It’s About the Oil, Stupid

THE RACE FOR IRAQ’S RESOURCES: Will Iraq’s Oil Blessing Become a Curse?
By Joshua Gallu in Berlin

The Iraqi government is considering a new oil law that could give private oil companies greater control over its vast reserves. In light of rampant violence and shaky democratic institutions, many fear the law is being pushed through hastily by special interests behind closed doors.

Oil. The world economy’s thick elixir yields politics as murky and combustible as the crude itself. And no wonder. It brings together some awkward bedfellows: It’s where multinationals meet villagers, where executives meet environmentalists, where vast wealth meets deep poverty, where East meets West.

Oil, of course, can be politically explosive at the best of times, let alone the worst. So, when the country with the third largest oil reserves in the world debates the future of its endowment during a time of civil war, people sit up and take notice.

The Iraqi government is working on a new hydrocarbons law that will set the course for the country’s oil sector and determine where its vast revenues will flow. The consequences for such a law in such a state are huge. Not only could it determine the future shape of the Iraqi federation — as regional governments battle with Baghdad’s central authority over rights to the riches — but it could put much of Iraqi oil into the hands of foreign oil companies.

Political differences could still derail the legislative process. The Kurdish and Shia populations want to control their oil-rich territories without Baghdad’s help. Meanwhile Sunni Arabs located in the oil-poor center of the country want the federal government to guarantee they’re not excluded from the profits.

Read the rest here.

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