Shell 'wins' Iraq gas contract

Oil giant Shell has recently won the Big Oil race to become the first major oil company to gain access to Iraq's energy sector since the 1970s. With no competitive bidding process, the Dutch-British multinational has 'won' a $4bn contract to process and market natural gas with the South Gas Company in Basra.

The deal has been conducted in secret, leaving important information about the terms and authorship unknown. This secrecy has meant the contract was not subject to any public scrutiny or debate. Platform co-director Greg Muttitt surmised that "a country under occupation has introduced an oil policy that is favourable to western oil companies. The [US] State Department has already admitted that it has advisers working on oil policy and there is a likelihood they may have drafted the Shell contract."

However, attempts to gain control over Iraq's oil fields have not gone so well. As Corporate Watch reported last year, an oil law permitting de-facto oil privatisation was drafted under pressure from Big Oil, the US and UK governments, their consultants, and the IMF. It was presented to the Iraqi parliament in May 2007 and was expected to pass quickly. However, Iraqi and international opposition to transferring oil sovereignty to multinational oil companies has helped create a climate in which the Iraqi parliament has been able to resist the extreme pressure by US and UK governments and the has not been passed to date. So the big oil companies and governments are busy finding other avenues to the eventual prize of control over Iraq's vast oil fields.

These avenues include discussing, preparing, and now bidding for contracts such as Risk Service Contracts (RSCs). While usually offering companies less in terms of long-term control over production and revenue than the prized Production Sharing Contracts (PSCs), they can nonetheless be written to be very similar to PSCs. The 'devil' is in the detail with these complex agreements, details which have not been disclosed. What is certain is that, if secured, they will represent a radical departure from traditional Iraqi – and indeed international – oil policy

 

~ more... ~