Iraq: All eyes on the oil prize

It Is nearly seven years after the US-led invasion of Iraq. US imperialism had hoped for a quick war, the Iraqi oil industry under the control of US companies and a compliant, stable regime. However, the situation today is very different to what George Bush and Tony Blair envisaged.

The Iraqi population has been abandoned, facing high levels of unemployment and a lack of basic resources, while the Iraqi government and oil companies struggle for control of the country’s enormous oil wealth. This has increased sectarian and national tensions within Iraq and these tensions are spilling over into the forthcoming elections on 7 March. Recent bomb attacks underline the dangerous situation that ordinary Iraqis still face.

The number of Iraqis violently killed rises


Control of the oil wealth in the predominantly Kurdish area of northern Iraq is a major issue underpinning a lot of tensions. That oil wealth is potentially vast. Estimates put the reserves in Iraq at 115 billion barrels, probably more than Iran’s and second only to Saudi Arabia. Yet production is still running at 100,000 barrels per day (bpd) lower than the pre-war daily average of 2.5 million.

In post-Saddam Iraq, the US government was hoping to dramatically increase output under the control of predominantly US oil companies. To try to achieve this aim Paul Bremer, Bush’s chief representative in Iraq in the year following the invasion, under the guise of removing all members of Saddam Hussein’s Baath party from their positions, sacked oil technicians, engineers and administrators leaving behind only a skeleton crew of Iraqi oil workers to manage the existing production.

Bremer was hoping that private oil companies, eager to exploit the oil wealth, would come in with their workforces to take over. Some companies did, but attacks on oil pipelines and facilities increased from 200 in the first two years of occupation to 600 in 2007. In part this was in response to Bremer ripping up agreements over access to oil by the local population.

The major oil companies weighing up the risks decided the danger was too great at that stage. Also, significant action was taken by Iraqi oil workers striking against the privatisation of oil facilities in Basra.

Arguments developed between the Iraqi government and US about how the oil fields could be developed. None of these arguments centred on improving conditions for ordinary Iraqis, but who gets the biggest share of the oil wealth, the Iraqi regime or the oil companies.

In an attempt to develop the oilfields, on 2 January 2009 the Iraqi government offered a new deal to oil companies wanting to invest in Iraq, offering them $2 for every barrel they extracted after their original investment costs had been met.

The major oil companies initially rejected these terms out of hand, demanding complete control over production and payments of $25 per barrel! However, the Chinese National Petroleum company was keen to gain a foothold in Iraq and get its hands on some of the vast reserves. It induced BP, its partner in Iraq, to develop the Ramaila oilfield near Basra on the Iraqi government terms.

As a result of this other companies, not wanting to see the Chinese government gain all the most lucrative contracts, accepted contracts on the initial terms. These companies are mainly state-owned but include Shell and Exxon.

However, some members of the Iraqi parliament are now challenging these contracts, no doubt wanting to get their own hands on this oil wealth but also feeling the pressure from ordinary Iraqis angry at seeing jobs and the oil wealth leaving Iraq.

As Brigadier Marriner, the British defence attaché at the British embassy in Baghdad mused: "As a senior American politician said, ’If this was not about oil in 2003, it certainly is now’."


This is the background to the current elections. The government of prime minister Nuri al-Maliki is widely distrusted in Iraq. Iraq is judged as the fifth ’most corrupt’ country in the world by Transparency International. US president Barack Obama is desperate for these elections to be held and to show some thin veneer of democracy.

The Iraq war and occupation has already cost the US government over $707 billion. At a time of the biggest economic crisis since the 1930s and with a US government debt of 12% of GDP, Obama urgently wants to limit the cost of this war with the aim of an ultimate withdrawal. But this cannot be at any cost. They want some form of stable regime that they can work with and one that will not stand in the way of the increasing exploitation of the oil wealth by private oil companies.

What these elections are not about is offering any dramatic improvement in the lives of ordinary Iraqis. All of the parties contesting the elections support the maintenance of capitalism and the ensuing cuts and privatisations that flow from this, while the wealthy elite enrich themselves at the workers’ expense.

Unfortunately for Obama a spanner has been thrown into the works with the banning of about 500 of the 6,000 candidates and 15 of the parties by Iraq’s accountability and justice commission.

Many of these are Sunni candidates and some have links to the banned Baath party. There is a fear that this could lead to an upsurge in sectarian violence and a boycott of the elections by sections of the Sunni-Arab population.

These elections will only serve to underline the majority of Iraqis’ feelings towards the political process. As a retired agriculture professor in Baghdad recently said: "Most people don’t trust the politicians now. They know they’re backed by some outside power, and the biggest power is the Americans, so whoever the Americans back will win."

Iraqis’ lives

The conditions that most Iraqis face are a clear reminder that the war and occupation were nothing to do with improving the lives of ordinary Iraqis. Unemployment stands at around 50% and about four million Iraqis are displaced. Alongside the fear that many Iraqis feel with the upturn in the bombing attacks, the conditions that many Iraqis face are brutal: 1,730 square kilometres of land are contaminated by landmines and unexploded ordnance, making 11% of all water supplies inaccessible.

Access to clean water is critical yet 15% of households are not connected to the public water network and in some areas 73% of the population have no access to safe water.

The number of women dying in childbirth is 300 women per 100,000 births in Iraq compared to 140 women per 100,000 births in neighbouring Iran. Yet prior to the years of western sanctions and then the invasion and occupation, Iraq had one of the more advanced health systems in the region.

Nearly a quarter of the population lives below the official poverty line of $2.20 a day and in just under 10% of districts in the country acute malnutrition in children – newly borns to five years old – runs at over 10%. Overcrowding in housing is also a massive problem with 13% of housing in urban areas occupied by ten occupants or more. There is a shortfall of two million houses.

Workers’ movement

There is evidence that the suppressed workers’ movement is struggling to improve the conditions for Iraqi workers, however small these steps forward may be.

The beginning of 2010 saw a strike of hotel workers at the Rasheed hotel in the green zone in Baghdad over a risk bonus. This followed on from a strike of leather workers which was successful in winning a 25%-30% safety bonus for 1,500 workers in the state-run enterprise of leather industries. Previous to that there had been an 18-day strike of 4,000 textile workers.

What is clearly lacking throughout Iraq is a non-sectarian mass workers’ party that will fight for workers’ rights and for the defence of public services, though these struggles can be part of the process of developing such a party.

This party needs to develop a programme that can begin to take the struggles of the Iraqi people forward. Its programme should include the democratic ownership by the people of Iraq of the major companies that dominate the economy and it should use the wealth of these companies, including the vast natural resources, for the benefit of the people of Iraq as a whole.

The unresolved issue of Kurdish national aspirations

A big issue in Iraq is the national aspirations of the Kurdish population. Consciousness varies in different parts of the Kurdish area of northern Iraq, with support ranging from autonomy to outright independence.

The CWI supports the right of the Kurdish population to self determination up to and including independence if that is what the majority of the population democratically decide.

It is no surprise that control of the oil reserves plays a part in this situation as well. The Kurdish area of Iraq sits on 5% of the world’s known oil reserves – the 6th largest in the world.

There are growing ethnic tensions between the Arab, Turkoman and Kurdish populations. On the Arab/ Kurdish border known as the ’trigger line’ there are 130 violent attacks a month. Many in Iraq, particularly in the government, do not want to see the separation of Iraqi Kurdistan – concerned at the loss of the oil wealth in the country.

However there is also pressure from neighbouring states, in particular Turkey, which is completely opposed to an independent Kurdish state of Iraq for fear of the effect this would have on the Kurdish population in Turkey.

In the Kurdish area in Iraq there is a growing mood amongst the population against the established Kurdish capitalist parties, the PUK and KDP, who many see as corrupt and not committed enough to national independence. Both the PUK and KDP have a history of perpetrating outrages against one another, including a catastrophic Kurdish civil war in 1993-1998.

A new political force Gorran ("movement for change") made a significant breakthrough in the elections to the regional parliament in July last year, winning 25 seats on an anti-corruption platform.

Gorran, however, is not a workers’ organisation. It is headed by former PUK leader and media owner Nawshirwan Mistefa, who wants to ’modernise’ the Kurdish region based on a free market economy.

The current situation shows the urgent need for an independent Kurdish party that is able to connect the national liberation aspiration to the social liberation of workers and poor people.

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March 2010