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Brit Hume Catapults the Propaganda on Iraqi Oil Law

Reported by Janie - February 27, 2007 -

During last night's (2/26) Special Report, host Brit Hume mentioned briefly the new oil law that was approved by the Iraqi cabinet yesterday. The very short segment was completely positive and only gave the Administration's stance on the legislation, while ignoring the unprecedented access given to Big Oil in the bill.

The entire coverage of the legislation consisted of Hume stating, "In Baghdad today, the Iraqi cabinet approved legislation to manage the country's vast oil industry and divide it's wealth among the population.

Prime Minister Nouri Al-Maliki said the measure would be another foundation stone as he put it in building a new Iraq. It remains to be approved by the legislature.

White House Spokesman Tony Snow called the move a key lynchpin in Iraq's recovery, because it gives Iraqis a shared economic interest in working together."

Comment: That was it. Nothing else has been, or was mentioned about the text of the bill, and what exactly the bill will do, thus protecting the Administration from criticism.

According to the Asia Times Online:

The new oil law gives foreign corporations access to almost every sector of Iraq's oil and natural-gas industry. This includes service contracts on existing fields that are already being developed and that are managed and operated by the Iraqi National Oil Co (INOC).

For fields that have already been discovered, but not yet developed, the proposed law stipulates that INOC will have to be a partner on these contracts. But for as-yet-undiscovered fields, neither INOC nor private Iraqi companies receive preference in new exploration and development. Foreign companies have full access to these contracts.

The exploration and production contracts give firms exclusive control of fields for up to 35 years, including contracts that guarantee profits for 25 years. A foreign company, if hired, is not required to partner with an Iraqi company or reinvest any of its money in the Iraqi economy. It's not obligated to hire Iraqi workers, train Iraqi workers or transfer technology.

The current law remains silent on the type of contracts that the Iraqi government can use. The law establishes a new Iraqi Federal Oil and Gas Council with ultimate decision-making authority over the types of contracts that will be employed. This council will include, among others, "executive managers from important related petroleum companies". Thus it is possible that foreign oil-company executives could sit on the council. It would be unprecedented for a sovereign country to have, for instance, an executive of ExxonMobil on the board of its key oil-and-gas decision-making body.

The law also does not appear to restrict foreign corporate executives from making decisions on their own contracts. Nor does there appear to be a "quorum" requirement. Thus if only five members of the Federal Oil and Gas Council met - one from ExxonMobil, Shell, ChevronTexaco and two Iraqis - the foreign company representatives would apparently be permitted to approve contacts for themselves.

Under the proposed law, the council has the ultimate power and authority to approve and rewrite any contract using whichever model it prefers if a "two-thirds majority of the members in attendance" agree. Early drafts of the bill, and the proposed model by the US, advocate very unfair, and unconventional for Iraq, models such as production sharing agreements (PSAs), which would set long-term contracts with unfair conditions that may lead to the loss of hundreds of billions of dollars of the Iraqi oil money as profits to foreign companies.

The council will also decide the fate of the existing exploration and production contracts already signed with the French, Chinese and Russians, among others.

Iraqi oil experts "believe the Bush administration, foreign oil companies and the International Monetary Fund are rushing the Iraqi government to pass the law." Others maintain "The law's key negative components harm Iraq's national sovereignty, financial security, territorial integrity and democracy."

In Hume's short blurb on the legislation not one of these factors were mentioned, and the misleading segment only included information positive to the Administration, making the bill appear as wholly positive.