According to the New York Times today:
Deals With Iraq Are Set to Bring Oil Giants Back
By ANDREW E. KRAMER - Published: June 19, 2008
BAGHDAD ? Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power. ...We learn that these deals are unusual "no-bid contracts." No one needs to be "suspicious" according to company executives, because they are just "helping" Iraq get new oil field development going while the oil law is stalled.
Turns out that the companies involved--Exxon Mobil, Shell, Total and BP--have history with the old colonial Iraq Petroleum Company (IPC). During the period from 1921 to 1958, oil was discovered and developed in Iraq by these multinational corporations and their precursors under concessions distinctly unfavorable to the Iraqis. This history is very complicated. But under the concession agreements of the 1920s, Iraq was the big loser, not even owning an equity share in the IPC.
The post-1958 revolutionary government began to reverse these harsh terms. The IPC monopoly was broken during the early 1960s and Iraq's oil was fully nationalized in 1971.
Does the pattern of what is happening today resemble a return to the old colonial system of oil concessions backed by imperial military force? I would say yes. The traditional British colonial pattern in the Arab Gulf states usually involved a commercial agreement between companies and a quisling ruler followed by a political agreement. Is that not exactly what we are seeing in Iraq right now? The commercial agreement described by the Times today lines up perfectly with the security agreement now being pushed upon a reluctant Iraq.
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