This article is from the Carbon Web Newsletter Issue 7, 30 May 2007

As Carbon Web goes to press, the Iraqi government’s end-of-May deadline for parliament to pass the controversial oil law is just days away. Like the US government’s 2006 deadline, this one looks set to be missed – again due to arguments over Kurdish insistence that regions play the primary role in signing contracts with foreign companies, and in receiving revenues.

In many respects, the draft law is as bad or worse than expected. Not only does it allow contracts of up to 30 years with foreign companies (without requirement for parliamentary approval), it sets no minimum limit on Iraqi participation in contracts.

But since it was drafted last year, the law has faced increasing opposition – from the Iraqi Federation of Oil Unions, other trade-unions, civil society groups and oil experts. As a result, recently published appendices to the law limit the damage. While it was expected that some of Iraq’s largest fields would be up for sale, instead around 84% of known reserves would remain controlled by the Iraq National Oil Company. A report by consultancy IHS however, predicts that Iraq’s undiscovered reserves could be as large as proven reserves: all of these would go to foreign companies, potentially giving them more than half of Iraq’s oil.

It could yet get worse. The Natural Resources Minister of Kurdistan’s Regional Government believes this division is too mean to the multinationals; he is apparently outraged that any of Iraq’s oil should be controlled by Iraqis.

On the other hand, opposition to the oil law is now spreading to large sections of the parliament. The parliamentary arithmetic suggests that – in the absence of fraud, bribery or intimidation – it will be difficult to pass the law. However, given the stakes involved, none of these can be ruled out.

Rumours abound of threats against members of parliament who oppose the law. Even the pro-US, pro-oil-law government is not safe. Advisers to Prime Minister Maliki told Associated Press that he fears the USA will bring down his government if the oil law is not passed by June.

Much of US impatience comes from the Democrats. After President Bush vetoed a bill calling for a timetable for troop withdrawal, Democrats are pushing instead for the oil law and other “benchmarks”. A campaign led by Oil Change International is working hard to expose Democrats’ hypocrisy and pressing for the oil law benchmark to be dropped.

Similar campaigns have been launched in Britain and Italy, PLATFORM is co-founder of Hands Off Iraqi Oil. There is still time to stop the oil law and early signs are that the issue could reinvigorate the anti-war movement. Many Iraqis would be glad if it did.

We have both an opportunity and a responsibility to stand with Iraqis, saying “Hands off Iraqi oil”. Early Day Motion (EDM) 1180 has been tabled in Parliament calling for the UK to disclose its involvement in Iraq’s new oil law. Documents released under the Freedon of Information Act have revealed that Foreign Office and Treasury Officials have been actively involved in shaping the Oil Law and furthering the agenda of foreign oil companies. In order for the EDM to be successful, we need as many MPs as possible to sign the motion.