News Release

“Crude Designs”: New Report Charges Big Oil “Rip-Off” of Iraq

GREG MUTTITT
The British group PLATFORM has just released a report: “Crude Designs: The Rip-Off of Iraq’s Oil Wealth.” Among the group’s findings:

· “Current Iraqi oil policy will allocate the development of at least 64 percent of Iraq’s reserves to foreign oil companies.”
· “The estimated cost to Iraq over the life of the new oil contracts is $74 to $194 billion, compared with leaving oil development in public hands.”
· “The contracts would guarantee massive profits to foreign companies, with rates of return of 42 to 162 percent. The kinds of contracts that will provide these returns are known as production sharing agreements (PSAs). PSAs have been heavily promoted by the U.S. government and oil majors and have the backing of senior figures in the Iraqi Oil Ministry. However PSAs last for 25-40 years, are usually secret and prevent governments from later altering the terms of the contract.”

“Crude Designs” author and lead researcher, Greg Muttitt, said today: “The form of contracts being promoted is the most expensive and undemocratic option available. Iraq’s oil should be for the benefit of the Iraqi people, not foreign oil companies.”

He continued: “The new Iraqi constitution opened the way for much greater foreign involvement in Iraq’s oilfields. Negotiations with oil companies are already underway, ahead of elections in December and prior to the passing of a new Petroleum Law. This report calls for full and open debate in Iraq about the way oil resources are to be developed, not 30-year deals negotiated behind closed doors.”

Muttitt added: “Experience in other countries shows that oil companies generally get the upper hand in PSA negotiations with governments. The companies will inevitably use Iraq’s current instability to push for highly advantageous terms and lock Iraq to those terms for decades.”
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JAMES PAUL
Executive director of the Global Policy Forum, a co-publisher of the report, Paul said today: “Greg Muttitt’s bombshell paper confirms what many have long suspected — the big U.S. and U.K. companies have enormous interest in Iraq’s giant untapped oilfields. He shows clearly how the companies have been angling to gain control of those fields and now, under the occupation, they are closing in on their goal. Production Sharing Agreements, the companies’ favorite legal ploy, have already been negotiated with pliant Iraqi officials. Likely to be rushed through after the December 2005 elections, these contracts may lock Iraq into decades-long arrangements that siphon as much as $200 billion from the Iraqi government into company coffers.”
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STEVE KRETZMANN
Executive director of Oil Change International, a co-publisher of the report, Kretzmann said today: “For years, we’ve listened to the Bush administration deride and deny the notion that oil had anything to do with the war in Iraq.”
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ERIC LEAVER
Leaver is a research fellow at the Institute for Policy Studies, also a co-publisher of the “Crude Designs” report.
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167