Big Oil Wins Iraq's Petroleum Resources
The long discussed plan to hand over most of Iraq’s oil assets to big foreign oil companies is about to happen. When people can't figure out what Bush means when he claims victory in Iraq, this is what he is talking about.
According to the Independent, the companies are looking at terrific profit potentials. "The US government has been involved in drawing up the law, a draft of which has been seen by The Independent on Sunday. It would give big oil companies such as BP, Shell and Exxon 30-year contracts to extract Iraqi crude and allow the first large-scale operation of foreign oil interests in the country since the industry was nationalized in 1972."
The plan envisions production sharing agreements among the oil companies and the Iraqi government. Such agreements are unusual in the Mideast. The production sharing agreements would run for 30 years with companies taking an initial 75 percent of all profits to cover costs and then 20 percent of all profits. According to the Independent that’s twice the industry average.