Greg Muttitt: Oil sell-off by stealth – Iraq’s oil service contracts are more than they seem

By Greg Muttitt, Co-Director of PLATFORM

Available in English, Arabic and Kurdish

This coming Monday, the Iraqi federal government is set to sign oil development contracts with BP, Shell, ExxonMobil and Total – their first since their 1925 concession was cancelled in the early 1970s.

The contracts are the biggest step yet towards long-term foreign control of Iraq’s oil. But their terms remain secret, as part of a bizarre game of intrigue on the part of the government and companies.

According to the Iraqi Oil Ministry, there is nothing controversial about these contracts, which cover six of Iraq’s largest oilfields. Although the fields account for around half of Iraq’s known oil reserves, the contracts are only for two years, and provide for the companies to supply equipment and technical guidance, in exchange for a fixed fee.

Even the most vehement opponents of oil privatisation do not object to such “technical service contracts” (TSCs): they are a normal model of business, where a company acts as contractor, providing a service to its client, a government or national oil company, for an agreed price. It’s the model used in the nationalised industries of the region, such as in Saudi Arabia and Kuwait.

But peel beneath the surface, and the contracts start to look very strange.

[Read the report]

Related: IPA: Was the Iraq Invasion for Oil After All?