Is draft oil law cheating Iraq out of revenue?

"The [Bush] administration has highlighted the law’s revenue sharing plan, under which the central government would distribute oil revenues throughout the nation on a per capita basis. But the benefits of this excellent proposal are radically undercut by the law’s many other provisions — these allow much (if not most) of Iraq’s oil revenues to flow out of the country and into the pockets of international oil companies.
The law would transform Iraq’s oil industry . . . into a commercial industry, all-but-privatized, that is fully open to all international oil companies.
The Iraq National Oil Company would have exclusive control of just 17 of Iraq’s 80 known oil fields, leaving two-thirds of known — and all of its as yet undiscovered — fields open to foreign control.
. . . Iraqis may very well choose to use the expertise and experience of international oil companies. They are most likely to do so in a manner that best serves their own needs if they are freed from the tremendous external pressure being exercised by the Bush administration, the oil corporations — and the presence of 140,000 members of the American military."

Op-ed by Antonia Juhasz, "an analyst with Oil Change International, a watchdog group." [1]

Ms. Juhasz raises a troubling possibility. I know little about oil or business, but why would Iraq agree to be cheated out of its oil revenue? While the Bush administration's ties to the oil industry are well-known, Congress and pundits from all sides had also been pushing Iraq to pass an oil law. What was their motivation?

I read through the oil law and it seemed OK. It had provisions for transparency, competitive bidding, royalties, taxes, etc. Article 9 said that model contracts would honor "national control," "ownership of the resources," and "optimum economic return for the country." But like I said, I know little about oil or business.

I look forward to another Op-ed piece (or adjustments to the draft oil law) that will address Ms. Juhasz's concerns.

source
Juhasz, Antonia. (The New York Times). Whose Oil Is It, Anyway? March 13, 2007.

resource
Draft Iraq Oil and Gas Law. February 15, 2007. (via the Oil Change International website).

posted: thursday, march 15, 2007, 2:12 AM ET
update: thursday, march 15, 2007, 2:23 AM ET

tags: iraq oil antonia juhasz