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U.S., al Qaeda Converge on Iraqi Oil

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WASHINGTON, D.C.—Consider this week’s two propaganda speeches, one from President George Bush and one from al Qaeda deputy Ayman al-Zawahiri.

President Bush, speaking on the Iraq economy Wednesday before the Council on Foreign Relations, painted an upbeat economic picture-of a country increasingly under local police
control, rebuilding its infrastructure, developing more
small business opportunities, preparing for a revived
tourist business. People are once more shopping
without fear, Bush said.

Bush conveniently left out meaningful talk about the only real source of economic
value for Iraq: the country’s oil. This is about as close as he came:

“Iraq’s a nation with the potential for tremendous prosperity. The country has a young and educated workforce. They’ve got abundant land and water. And they have among the largest oil resources in the world.”

In a video posted this week, al Qaeda leader al-Zawahiri spoke a little more directly about that oil. Reports the Australian Age, in an article headlined Bin Laden war on West just starting: deputy:

“I call on mujahideen to concentrate their attacks on Muslims’ stolen oil, most of the revenues of which go to the enemies of Islam while most of what they leave is seized by the thieves who rule our countries,” al-Zawahiri said.

Beyond the obvious nihilist imperative to bomb, bomb, bomb, al-Zawahiri is getting at a real piece of news about Iraq’s oil.

There have been numerous stories about Iraq’s
antiquated oil industry and the attacks on its
pipeline system. But there has been little or no press
on the biggest economic event in the nation’s recent
history: privatization of the once nationalized
industry. Privatization is due to occur after next
week’s parliamentary elections in Iraq. While Iraq will remain in control of a few oil fields, the bulk of them will be licensed out
in so-called production agreements-tantamount to
selling oil under long-term leases. In addition, the
plan calls for regionalizing the oil, placing control
of one part of the industry in Sunni hands, another in
Kurdish hands and one in Shiite control. That
effectively ends the nationalized industry and it
points towards carving up the country into three
parts, giving each part at least the semblance of
economic viability.

The oil riches will probably go to the Big Oil companies,
which can participate in the production sharing
agreements, and can also control processing and
distribution.

A report called “Crude Designs: the Rip-Off of Iraq’s Oil Wealth,” issued late last month, details the situation. It’s worth reading, because it shows that no matter how Bush tries to play the situation in Iraq, it’s all about the oil.

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