Created: Friday, 06 August 2010 15:00
FRFI 216 August/September 2010
Iraq: eyes still on the prize
Iraq held a parliamentary election in March 2010 but still the country does not have a new government. The State of Law coalition, led by incumbent Prime Minister Nouri Al Maliki, joined forces with the other Shi’ite bloc, the Iraqi National Alliance, to achieve an overall majority but they cannot agree on who should be the new prime minister. US Vice-President Joe Biden has intervened to try and forge an agreement between Al Maliki and the imperialists’ favourite, Iyad Allawi, whose Iraqiya coalition won the most seats.
The Iraqi government is riddled with corruption. The state is the main employer, and those in power use the offer of state jobs as patronage and bribery. Anyone in the media attempting to expose the corruption is likely to be murdered. Iraq’s people suffer massive unemployment, little access to clean water and extensive power cuts. There have been riots in many parts of the country because, in temperatures of 50 degrees, people were unable to operate any air-conditioning or cooling systems. Violence continues with the threat of renewed sectarian warfare and a simmering dispute over the status of Kurdistan.
Nevertheless, the oil multinationals are rushing in to grab Iraq’s energy resources. As one oil consultant told the Financial Times last year, ‘Iraq may be at the bottom of the scale ranking investment climate... but it is at the top of the scale ranking the attractiveness of its oil reserves.’ The known oil and gas reserves are third in size to those of Saudi Arabia and Iran, but there may be another 100 billion barrels of oil in the west of Iraq. More importantly, these are the only major reserves still open to expansion by the oil companies now that 88% of the world’s oil is controlled by the countries concerned. Furthermore, Iraqi oil is easy to develop compared with many other available reserves in isolated regions or offshore, witness BP’s problems in the Gulf of Mexico. Most of the oil fields to be developed are in Shi’ite areas, the most secure parts of Iraq.
Last year BP, Shell, Exxon and Total bid for 11 oil service contracts. Most are establishing expensive headquarters in Basra. In June, Shell signed a $12.5 billion gas production agreement. Altogether, the oil multinationals intend to spend around $100 billion over ten years to quadruple production to 9.5 million barrels per day. This far outweighs the potential increased capacity of the rest of OPEC and will create difficulties for countries such as Saudi Arabia and Iran, the political consequences of which will not have been lost on the imperialist governments.