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The implications of oil licensing rounds
On: Sun 07/31/2011 20:24
BAGHDAD - A follow-up citizen
Guardian: behind the scenes agreement allowed the British firm grip on Iraq
British newspaper The Guardian revealed that British oil giant British Petroleum (BP) has been accused of tightly grip on the Iraqi economy after the approval of the Iraqi government to pay compensation to the company even in the event of a suspension of oil production in Iraq's Rumaila.
The paper quoted - in a report posted on its website - for confidential documents obtained by "The original agreement for the operation of the largest field in Iraq have been re-drafted, so that you will get the oil company immediately for compensation due to any disruption of local or take government decisions to cut production." Some critics claimed that this might affect the political decisions taken by the Iraqi government regarding the Organization of Petroleum Exporting Countries is also a dangerous step moving away from the original terms of the agreement in the summer of 2009.
The newspaper quoted Greg Muttitt writer and activist specializing in oil and politics in Iraq as saying "The auctions of oil held by Iraq was a model of transparency and a negotiating victory for the Iraqi government, but now I see reality otherwise there is an agreement behind the scenes allowed the British firm grip on the Iraqi economy, as well as influence on the decisions of OPEC.
The newspaper pointed out that the oil industry provides 95 percent of Iraq's foreign earnings and there are plans to increase the production of Rumaila to nearly triple within the next three years from the current one million barrels per day. She added that the Rumaila, which lies 20 miles from the Kuwaiti border, is already 40% of the total production of Iraq, even before the expansion of its production, which produces nearly half of the total output of North Sea fields in the UK. The Iraqi government had said in 2009 during the signing of the agreement it entered into a fantastic deal, which is supported by oil analysts in the West who were surprised by the acceptance of BP conditions like this.
She said the documents that the original terms of the agreement proposed by the Iraqi Oil Ministry, under which the British company to become a contractor and not the owner and operator has been modified to become the company and its Chinese partner in the development of more benefit.
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