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"Crude Designs": New Report Charges Big Oil "Rip-Off" of Iraq


Institute for Public Accuracy

GREG MUTTITT, greg.muttitt@pobox.com, http://www.CrudeDesigns.org

The British group PLATFORM has just released a report: "Crude
Designs: The Rip-Off of Iraq's Oil Wealth." Among the group's
findings:
* "Current Iraqi oil policy will allocate the development of at
least 64 percent of Iraq's reserves to foreign oil companies."
* "The estimated cost to Iraq over the life of the new oil
contracts is $74 to $194 billion, compared with leaving oil
development in public hands."
* "The contracts would guarantee massive profits to foreign
companies, with rates of return of 42 to 162 percent. The kinds of
contracts that will provide these returns are known as production
sharing agreements (PSAs). PSAs have been heavily promoted by the U.S.
government and oil majors and have the backing of senior figures in
the Iraqi Oil Ministry. However PSAs last for 25-40 years, are usually
secret and prevent governments from later altering the terms of the
contract."
"Crude Designs" author and lead researcher, Greg Muttitt, said
today: "The form of contracts being promoted is the most expensive and
undemocratic option available. Iraq's oil should be for the benefit of
the Iraqi people, not foreign oil companies."
He continued: "The new Iraqi constitution opened the way for much
greater foreign involvement in Iraq's oilfields. Negotiations with oil
companies are already underway, ahead of elections in December and
prior to the passing of a new Petroleum Law. This report calls for
full and open debate in Iraq about the way oil resources are to be
developed, not 30-year deals negotiated behind closed doors."
Muttitt added: "Experience in other countries shows that oil
companies generally get the upper hand in PSA negotiations with
governments. The companies will inevitably use Iraq's current
instability to push for highly advantageous terms and lock Iraq to
those terms for decades."

JAMES PAUL, james.paul@globalpolicy.org,
http://www.globalpolicy.org/security/oil/2005/crudedesigns.htm

Executive director of the Global Policy Forum, a co-publisher of
the report, Paul said today: "Greg Muttitt's bombshell paper confirms
what many have long suspected -- the big U.S. and U.K. companies have
enormous interest in Iraq's giant untapped oilfields. He shows clearly
how the companies have been angling to gain control of those fields
and now, under the occupation, they are closing in on their goal.
Production Sharing Agreements, the companies' favorite legal ploy,
have already been negotiated with pliant Iraqi officials. Likely to be
rushed through after the December 2005 elections, these contracts may
lock Iraq into decades-long arrangements that siphon as much as $200
billion from the Iraqi government into company coffers."

STEVE KRETZMANN, steve@priceofoil.org, http://www.priceofoil.org

Executive director of Oil Change International, a co-publisher of
the report, Kretzmann said today: "For years, we've listened to the
Bush administration deride and deny the notion that oil had anything
to do with the war in Iraq."

ERIC LEAVER,erik@ips-dc.org, http://www.ips-dc.org/projects/newinternat.htm

Leaver is a research fellow at the Institute for Policy Studies,
also a co-publisher of the "Crude Designs" report.

For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020, (202) 421-6858; or David Zupan, (541) 484-9167

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