Iraq: New “Colonial” Era of Oil Exploitation Begins

The British military may be gone, but the British oilmen are back. Today is the day that the oil men from BP take control of Iraq’s biggest oilfield: Rumaila.

It is the first important oil deal since the 2003 invasion, and a long time since 1961 when Iraq passed Law 80 that wrestled back 99.5 per cent of the country’s oil reserves from the international companies like BP. At the time Iraq considered the law an act of self-defence.

Just over a decade later, in 1972, Iraq nationalised its oil industry. Documents from the time show the oil was nationalised due to the “robbery and exhaustion practiced by the monopolistic oil companies” that had made the oil industry suffer “from weakness, stagnation and backwardness”.

Now it is precisely these reasons that the international oil companies are being invited back in. But BP’s take over of Rumaila is highly unpopular “with local politicians invoking resentful memories of their nation’s colonial past”, according to an article in today’s Times.

Many Iraqi MPs are still saying the deal is illegal, and that the constitution should give them, not the Oil Minister, the final say over the country’s vast resources.

But none of this will bother BP which will now develop the Rumaila field, which is believed to hold about 17 billion barrels of oil, with CNPC, the Chinese oil company.

This week several Iraqi MPs wrote a letter of protest to Christopher Prentice, the British Ambassador in Baghdad, saying that BP’s move was undermining democracy by circumventing parliamentary approval of the Rumaila deal.

“BP’s willingness to sign the contract encourages the Oil Ministry to violate the constitution,” said Jabir Khalifa Jabir, secretary of the oil and gas committee in parliament.

Despite these criticisms, the Iraqi government is pushing ahead with other deals, signing a new deal with ENI to develop the Zubair field, which is set to be the second biggest project after BP.

Iraqi Oil Minister Hussain al-Shahristani, has hailed the ENI deal as significant.”Today, Iraq made a big leap on the way to develop its oil industry,” said al-Shahristani. “We are happy with this progress and the achievement.” Shahristani also promised “more good news in the coming days that will “put Iraq on the international oil map.”

The comments on the Times reflect the general cynicism about the BP deal: One person wrote: “Why is anyone surprised at this, surely that was the real reason for the war in the first place,” and another commented “Silly me. Here I was thinking Britain invaded Iraq in the name of democracy, peace and goodwill to all men.”