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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: MSI who wrote (346173)	1/22/2003 8:40:21 PM
From: Just_Observing	Read Replies (4) \| Respond to of 769667

Re: Wow, that's 4x to 10x higher than what was published as a "valuation"... It's not just the valuation. It also has to do with future supply. When everyone else's oil has been depleted, Iraq will have huge reserves. So the true strategic value of Iraqi oil is almost priceless. That explains the haste to go to war to grab this asset, IMHO. Take a look at the statistics on the ratio of reserve to oil production – the number of years that reserves of oil will last at current production rates – compiled by Jeremy Rifkin in Hydrogen Economy. In the US, where more than 60 per cent of the recoverable oil has already been produced, the ratio is just 10 years, as it is in Norway. In Canada, it is 8:1. In Iran, it is 53:1, in Saudi Arabia 55:1, in the United Arab Emirates 75:1. In Kuwait, it's 116:1. But in Iraq, it's 526:1. And this forthcoming war isn't about oil? victoria.indymedia.org

To: MSI who wrote (346173)	1/22/2003 8:42:04 PM
From: Gordon A. Langston	Read Replies (1) \| Respond to of 769667

What did we get from Kuwait? philly.com Posted on Sun, Jan. 12, 2003 Trudy Rubin \| Talk about oil and Iraq is just that: A lot of talk By Trudy Rubin Is the United States going to war with Iraq to get its hands on Iraqi oil fields? Nearly everyone in the Middle East thinks so. So do some Americans. The theory is seductive. Iraq has the world's second-largest oil reserves, with rich new fields to explore. It's not just critics of an Iraq war who speculate about a war-oil linkage. Conservative pundits contend that post-Saddam Iraq will turn on the pumps and drive global oil prices down, while pulling out of the OPEC oil cartel and replacing the unpleasant Saudis as our key oil ally. Administration officials predict that oil will pay for all of Iraq's reconstruction - and, some hint, for the costs of war. The only problem with all these oil theories is that they are wrong. There will be no fantastic oil bonanza at hand if Saddam Hussein is ousted. After 20 years of war and sanctions, Iraq's oil infrastructure is in disarray. It will take three or more years and $7 billion to $8 billion just to get back to 1980 production levels of 3.5 million barrels per day, according to experts. Boosting production to 6 million bpd would take $30 billion to $40 billion more in investment - and many more years. (So much for hopes that the Iraqi oil tap will soon make Saudia Arabia's 8 billion bpd irrelevant). Moreover, Baghdad doesn't even have the cash to get started. Iraq's annual oil revenues at present are only around $10 billion a year. Even if we assume that Saddam doesn't torch the oil fields as a parting gesture, that level of income won't begin to meet the country's immediate needs. There will be huge emergency humanitarian bills after a military conflict. There will be an urgent need to rebuild basic infrastructure, like power grids, roads, and hospitals, which will eat up $25 billion to $100 billion more. Do the math, and what you get is a huge shortfall. In the next couple of years, international donors will have to pour money into Iraq. Anyone who imagines that Iraqi oil is going to pay the $100 billion bill for a war there is in fantasyland. Of course, foreign investment could help speed up the oil industry's recovery and augment Iraq's future income. But this brings us to the political impediments to dipping into Iraqi oil. U.S. companies might not be in a hurry to invest in an Iraq whose stability will be shaky in the near term. Even if they are eager, they will confront crucial issues of Iraqi nationalism - and of law. Iraq, like the rest of the Gulf, has a state-owned oil company. No foreign oil company has operated in Iraq since 1960. Multinationals buy Iraqi oil for refining, but they have no equity share in the oil fields, nor do they get any percentage of oil for services performed. In a desperate bid for political support, Saddam promised the Russians and the French that he would offer them a chance to develop new oil fields. But if his dictatorship ends, any new oil arrangement will require the passage of new laws by a new, democratically elected parliament. This process will be time-consuming, but - if the Bush administration really means to support democracy - it must accept the results. And the results may not be to its liking. "If the Baath Party survives, or some general makes a coup, it might be conceivable they would give the U.S. some oil contracts," says oil expert Fereidun Fesharaki of the East-West Center in Honolulu. "But if they have proper elections... you can't predict. You might have a nationalist government which doesn't want equity sharing or to give the U.S. the oil." Prime case in point: After the Gulf War, American companies expected to be invited to develop new Kuwaiti oil fields. Kuwait's government was willing, but the elected parliament refused. For similar Arab nationalist reasons, many experts expect that a new Iraqi government would stay in OPEC. "Iraq was a founding member of OPEC," says Amy Myers Jaffe, senior energy adviser at the James A. Baker III Institute in Houston. "You can't eradicate a country's history because they have a new government." That history - which includes British colonial rule - will require the United States to handle the oil issue with care after an Iraq war. Iraq has many oil experts, inside and outside the country, who can manage the industry. Control should be turned over to them once oil proceeds are weaned from U.N. supervision under the "oil-for-food" program. An elected Iraqi government may give contracts to U.S. companies or not. But any heavy-handed U.S. pressure is likely to boomerang and confirm the beliefs of those who think the war was only about oil. Even though, in reality, Iraq's fields are not up for grabs.