UK in 'murky Iraq oil deal'

Rights group says diplomats unfairly pushed British business agenda in Iraq.

    Kim Howells, a foreign office minister, called the claims "paranoia gone completely loopy"
    British diplomats have been involved in "extensive efforts since at least 2004 to push for companies such as BP and Shell to receive long-term contracts, which would give them exclusive rights to extract Iraq's huge oilfields", Platform said in a press release on Friday.
    The group said they were able to prove this using documents obtained under Britain's freedom of information act.
    Muttitt said Iraqis have been "excluded" from the oil law while the British foreign office played a "central role in supporting the efforts of the oil companies to lobby the Iraqi government".
    Contentious legislation
    Iraq has proven oil reserves of 115 billion barrels, with billions more thought to be as yet undiscovered, but since the 2003 US-led invasion of Iraq the country has been in chaos and unable to adequately exploit its own resources.

    "What's right is what works. The oil industry and business people generally are very good at getting things done"

    David Horgan,
    managing director of Petrel Resources

    New legislation, drafted by Iraq's fledgling government, is aimed at reviving the country's oil revenues, but critics say the majority of the money will be going to multinationals.
    The oil companies will operate under production sharing agreements (PSAs), long-term contracts, signed between oil companies and the nation which owns the resources.
    But critics say the agreements will lock Iraq into unfair arrangements at a time when Iraq is not in a position to negotiate.
    Figures from the International Energy Agency show that PSAs are only used for about 12 per cent of world oil reserves and critics argue this means there must be other, fairer methods.
    A 2005 study by Platform shows that not only would Iraq be likely to loose billions of dollars in oil revenue under the likely terms of oil contracts, but returns for oil companies would be as much as 162 per cent, "far in excess of usual industry minimum targets of around 12 per cent return on investment".
    Britain rejects accusations
    Speaking to Al Jazeera's People and Power programme broadcast on Friday, Kim Howells, a British foreign office minister, denied those claims, calling them "paranoia gone completely loopy".
    Howells said: "This is paranoia gone completely loopy ... If we were interested in the oil, we would have done those dirty deals that some of the other countries did with Saddam Hussain and the gangsters who ran his regime."
    He also accused campaigners of seeking to promote their own causes at the expense of the Iraqis.
    "It's a shameful lie because they're not interested in the welfare of the Iraqi people, they're only interested in aggrandising their own conspiracy theories," he said.
    Oil industry responds
    Speaking to People in Power, David Horgan, managing director of Petrel Resources, said: "If you worry too much about a perfect solution, you will get no solution. What's right is what works. The oil industry and business people generally are very good at getting things done."
    Petrel Resources was awarded a development service contract for Iraq's Subba and Luhais oil field in September 2005.
    Critics have also said the new legislation, which aims to share oil revenues between 18 provinces making allocations based on population levels, will aggravate sectarians tensions in Iraq.
    Isam Al-Chalabi, Iraq's former oil minister, has called the oil law "ambiguous and unclear".
    He said: "If it's accepted in its present form certainly it will not be a new beginning to the betterment of the people. On the contrary, it is only adding fuel to the fire."

    SOURCE: Al Jazeera


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