The unfolding collapse of the US proxy government in Baghdad has cut short a process of legalising the denationalisation of the hydro-carbon industry in Iraq, which became within reach with the latest electoral victory of the Iraqi premier since 2006, Nouri Al-Maliki. Denationalisation and privatisation of the Iraqi oil and gas industry began with the US-led invasion in 2003. Al-Maliki for eight years could not pass a hydro-carbons law through parliament. Popular opposition and a political system based on sectarian distribution of power and “federal” distribution of oil revenues blocked its adoption. Ruling by political majority instead by sectarian consensus was Al-Maliki's declared hope to enact the law. Al-Maliki's plans towards this end together with his political ambitions for a third term were cut short by the fall to armed opposition on 10 June of Mosul, the capital of the northern Nineveh governorate — second only to Baghdad as Iraq's largest metropolitan area. Three days on, with the fighting moving to the gates of Baghdad, “the most important priority for Baghdad right now is to secure its capital and oil infrastructure,” a Stratfor analysis 11 June concluded. The raging war in Iraq now will determine whether Iraqi hydro-carbons are a national asset or multinational loot. Any US military support for the regime it installed in Baghdad should be viewed within this context. Meanwhile, this national wealth is still being pillaged as spoils of war. Al-Maliki is not now pre-occupied even with maintaining Iraq as OPEC's number two oil producer, but with maintaining a level of oil output sufficient to bring in enough revenues to finance a defensive war that left his capital besieged and his government with only southern Iraq to rule, and maybe not for long. Even this modest goal is in doubt. Al-Maliki is left with oil exports from the south only, the disruption of which is highly possible anytime now. Worries that fighting would spread to the southern city of Basra, or to Baghdad, have already sent oil prices to a nine-month high Thursday, the Christian Science Monitor reported 12 June. Legalising the denationalisation of Iraqi hydro-carbon industry has thus become more elusive than it has ever been since 2003. On 1 June, 42 years ago, the process of the nationalisation of the hydro-carbon industry kicked off in Iraq. Now Iraq is an open field for looting its only strategic asset. The international rush for the Iraqi “black gold” by transnational oil and gas corporations is at its height with no national law or competent central authority to regulate it. Iraq's “oil industry” now “operates, gold rush-style, in an almost complete absence of oversight or regulation,” Greg Muttitt wrote in The Nation, 23 August 2012. Nothing changed since, except that the “rush” was accelerating and the denationalisation process was taking root, squandering the bloody sacrifices of the Iraqis over 82 years to uproot foreign holds on their major strategic asset. The ongoing fighting is threatening to cut this process short.
Tip of the iceberg The Kurdistan Regional Government (KRG) in Iraq has been awarding hydro-carbon contracts to foreign firms independently without reference to the central government in Baghdad. Since early 2014, it has been pumping crude to Turkey via its own independent pipeline built last December. On 4 June, Turkey and the KRG announced the signing of a 50-year deal to export Iraqi oil from Kurdistan via Turkey. Hussein Al-Shahristani, Iraq's deputy prime minister, threatened legal action against firms that purchased “smuggled oil” via the Turkish-KRG arrangements; he accused Turkey of “greed” and trying “to lay (its) hands on cheap Iraqi oil”. Baghdad filed for arbitration against Turkey's state-owned pipeline operator BOTAS with the International Court of Arbitration of the International Chamber of Commerce in Paris. Baghdad says the Turkish-KRG arrangements are illegal and unconstitutional, but its own contract awarding is also unlawful. Should a change of guard occur in Baghdad, Al-Maliki and his government would be held accountable and probably prosecuted. The dispute between Baghdad, on the one hand, and Turkey and the KRG, on the other, is only the tip of the iceberg of the “gold rush-style” looting of Iraq's national wealth. One of the main priorities of Al-Maliki all along has been to legalise the denationalisation and privatisation process. Greg Muttitt, author of Fuel on the Fire: Oil and Politics in Occupied Iraq, wrote a few months before Al-Maliki assumed his first premiership that American and British governments made sure the candidates for prime minister knew what their first priority had to be: to pass a law legalising the return of foreign multinationals. This would be the vital biggest prize of the US 2003 invasion. Al-Maliki is the right man to secure a pro-privatisation government in Baghdad. Thomas Friedman described him in The New York Times on 4 June as “our guy”, “an American-installed autocrat” and a “big gift” the US occupation “left behind in Iraq”. Various drafts of hydro-carbon privatisation laws failed to gain consensus among the proxy sectarian parties to the US-engineered “political process” and the “federal” entities of Iraq's US-drafted constitution. Al-Maliki's government endorsed the first draft of a privatisation law in February 2007, and on 28 August 2011 endorsed an amended draft that the parliament has yet to adopt. Iraqi trade unions, amid popular protests, opposed and fought the privatisation draft laws. Their offices were raided, computers confiscated, equipment smashed and their leaders arrested and prosecuted. Nonetheless, parliament could not pass the law. Al-Maliki government began awarding contracts to international oil and gas giants without a law in place. They are illegal contracts, but valid as long as there is a pro-privatisation government in Baghdad.
US Executive Order 13303 Former British and US leaders of the invasion of Iraq, Tony Blair and George W Bush, were on record to deny that the invasion had anything to do with oil, but US President Barack Obama has just refuted their claim. On 16 May, Obama signed an executive order to extend the national emergency with respect to Iraq for one year. His predecessor, Bush, signed this “order” for the first time on 22 May 2003 “to deal with the threat to the national security and foreign policy of the United States posed by obstacles to the continued reconstruction of Iraq”. Details of Bush's Executive Order (EO) No 13303 are still kept out of the media spotlight. It declared that future legal claims on Iraq's oil wealth constitute “an unusual and extraordinary threat to the national security and foreign policy of the United States”. Section 1(b) eliminates all judicial process for “all Iraqi petroleum and petroleum products, and interests therein, and proceeds, obligations or any financial instruments of any nature whatsoever arising from or related to the sale or marketing thereof, and interests therein, in which any foreign country or a national thereof has any interest, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of United States persons.” EO 13303 was rubber-stamped by UN Security Council Resolution No 1483, which protected the US-controlled governmental institutions in Iraq. Muttitt wrote in August 2012: “In 2011, after nearly nine years of war and occupation, US troops finally left Iraq. In their place, Big Oil is now present in force.” “Big Oil” is now the only guarantor of the survival of the US proxy government in Baghdad, but the survival of “Big Oil” itself is now threatened by the escalating and rapidly expanding armed opposition. Obama said the “threats” and “obstacles” to US interests in Iraq have not changed 11 years after the invasion; Iraq has not enacted a hydro-carbon law to legalise the privatisation of its oil and gas industry. The developments of last week in Iraq vindicate Obama's renewal of EO 13303. The US war on Iraq is not over and it is not won yet. Hence Obama's recent extension of the national emergency with respect to Iraq for one year. Since Great Britain granted Iraq its restricted independence in 1932, the nationalisation of Iraqi oil wealth was the national and popular battle cry for complete sovereignty. It is now the battle cry of the armed opposition. Iraq has been targeted by Western powers since the “republic” under the late Abdel-Karim Qassem enacted Law No 80 of 1961, which deprived foreign companies of the right to explore in 99.5 per cent of the Iraqi territory, but mainly since the Baath regime led by the late Saddam Hussein decided to nationalise the hydro-carbon industry on 1 June 1972. The writer is a veteran Arab journalist based in Birzeit in the West Bank of the Israeli-occupied Palestinian territories.
