Archive for May, 2007

May 23rd, 2007

JFK speech contra secrecy, “national security” measures, etc

Posted in Sorrows of Empire by ed

very much in line with US constituional law re eg wiretapping (Brandeis in Gilbert) until FISC

May 20th, 2007

Iraqi Oil Privatization & Wolfowitz

Posted in Mideast & Oil by ed

Wolfowitz’s ouster at the World Bank may have something to do with the fact that, wearing that hat, he did his best to push through a privatization Oil Law in Iraq.

This issue — whether Iraq’s oil facilities will remain nationalized and thus a part of OPEC or, rather, get sold to private companies that would sell the oil outside OPEC — has been on the burner since BEFORE the Iraq war began. The clear proponents were the American Likud lobbyists in D.C. (Wolfowitz of course among them). Opponents were, inter alia, the Oil Mafia.

Greg Palast reports with documentation on this Oil Law struggle in his 2006 book, Armed Madhouse. The story six weeks ago seemed to have concluded — with the big push (to pass the privatization law) coming from the Wolfowitz World Bank.

Privatization would be a strategic move against OPEC and in particular against Saudi Arabia — an attack on their control of global oil markets. It would be a victory for Israel in its ongoing struggle (since 1973) to be Uncle Sam’s best girl in the mideast. To kick the Saudis out of bed. To put an end to Sam’s nefarious (in Tel Aviv eyes) menage a trois.

That is: if Iraq’s HUGE reserves, which have been repressed for decades, are fully exploited outside OPEC — ie by private interests rather than by the State of Iraq, which is a (long-suffering) OPEC member — it will undermine OPEC/Saudi pricing power and thus political power.

Palast reports in detail as to how the Oil Mafia stridently OPPOSED this privatization in 2002 (when the plan was hatched as part of the war plan by the D.C. so-called Neo-Cons) and then in autumn 2003, when a former chairman of one of the Seven Sisters (Chevron, if memory serves) suddenly appeared in Baghdad to lay down the law and stop Paul Bremer from ramming thru a privatization law then.(Seems the Oil Mafia doesn’t want privatization because it profits so well from the OPEC structure, pricing power, etc. The Oil Mob IS the OPEC structure … Apparently a truly independent Iraqi oil distribution channel would depress the price of oil in a big way. See the Palast account of why the Oil Mob opposed Bremer there in late 2003.)

[SPECULATION re Likud Lobby motives in pushing the privatization:  Israel has no oil.  News stories generally report that the new oil law would sell the Iraqi production facilities and oil rights to "UK and US companies."  Perhaps (speculation!) some of the buyers would in fact be Israeli interests, whether bedded in New York or Houston or London or the Channel Islands or the Caymans or ....

Perhaps then the privatization would not only be a way to reduce Saudi power, but also to pipe lion-share profits from one of top five oil reserves into Israel.

To look into this one would like to know who the "UK and US companies" the new stories refer to are. Since the Oil Mob is AGAINST the privatization, my guess is that the buyers are not BP and Exxon. But who are they? New outfits?  END SPECULATION]
After the Oil Mob crushed Bremer’s initiative in autum 2003, the momentum for privatization dissipated as the war situation deteriorated.  But then Wolfowitz was appointed to the World Bank, support for privatization revived under his direct leadership (or so it’s been reported in rare places), and in April 2007 an agreement on the privatization passed the Iraqi legislature, such as it is.

Several Iraqi and other Arab voices were screaming bloody murder about it (I think I posted one below) but the bill passed.
But now, six weeks or so later, the Iraqi legislators have kinda said wait a minute re the April agreement (although more in detail than principle it seems) — just as the Wolfowitz scandal (silly) and ouster (serious) is/was underway.

So I wonder if Wolfowitz’s attempt to revive the privatization was not a cause of his ouster. Have not seen any news story suggest this. But it’s rare to see any corporate news report of Likud lobby involvement in the oil law biz at all.

So Wolfie will be doing bad in the private sector for a while.  But it seems the privatization idea (as opposed to retaining a nationalized OPEC-member structure) is still in place, mere details of how to divide the revenue pie the sticking points in Baghdad.  We’ll see …