Saturday, November 26, 2005

BIG OIL using a Hollywood scam to steal Iraq's oil profits

Of four possible models for business relationships between oil companies and oil countries, neocons wanted the worst for Iraqis and big oil wants the second worst.

The best for the oil country is a nationalized system, when the oil belongs to the country, and oil companies are just paid for pumping the oil out (and don't necessarily share in the profits).

The second best for the oil country is a concession, when the countries essentially lease out the rights to drill and get a royalty percentage for the oil pumped, so they get a cut of whatever the oil is worth.

The WORST was the original neocon plan to totally privatize Iraq's oil and open it for foreign investment. So if someone bought the land that had oil under it, they wouldn't have to share ANY of the oil money with the Iraqis.

As greedy as oil companies are, they are not as stupid as the neocons and knew that would provoke opposition from the Iraqis.

The option they propose a "production sharing agreement" (PSA), sounds reasonable. The oil company extracts enough oil to cover their costs, then splits "profit oil" with the Iraqis.

Since I live in LA, this sounded familiar. It's the same scam Hollywood pulls on writers who have "profit" sharing in their contracts. The books are cooked so that even the highest grossing movies make no profit. The most famous case of this was Winston Groom who wrote the novel FORREST GUMP and was told the movie didn't make a profit, so he got no points.

This is so rampant that stars in the know like Arnold Schwarzenegger demand "first dollar" points, based on box office grosses (the numbers printed in the newspaper) rather than profits after the accountants have done their voodoo.

Most of the oil countries grant concessions to pump oil with royalties that are calculated based on oil pumped NOT what the oil company accountants claim their costs and profits are. It's hard to fudge that too much, because you can count the number of tankers that pull out of port or how much oil gets pumped through your pipeline.

The Bushies appointed Ahmed Chalabi to the Iraqi oil ministry to make sure the oil companies get what they want--he promised to be their tool even before the war. Similarly, the Bushies have set up mechanisms in the Iraqi constitution that makes it difficult for them to undo the economic "reforms" forced on them during the occupation.

If we are really interested in reducing hatred of the US and spreading democracy, we would let the Iraqis decide who gets to pump their oil, and how to divide the income with the corporations that do it.

Given the silence of both Democrats and Republicans on this issue, that's not likely to happen.

But I will be sending this post to my senators anyway.


Crude Designs:
The Rip-Off of Iraq’s Oil Wealth

By Greg Muttitt


There are essentially three models a country may choose from for the structure of its oil industry, plus a number of variations on these themes.

1. The system currently in place in Iraq, which has been the case since the early 1970s, is a NATIONALISED INDUSTRY. In this model, the state makes all of the decisions, and takes all of the revenue. The extent of involvement of foreign private companies is that they might be hired to carry out certain services under contract (a technical service contract) – a well-defined piece of work, for a limited period of time, and for which they receive a fixed fee. This is the model used throughout most of the Gulf region.

2. In the CONCESSION model, sometimes known as the tax and royalty system, the government grants a private company (or more often, a consortium of private companies) a license to extract oil, which becomes the company’s property (to sell, transport or refine) once extracted. The company pays the government taxes and royalties for the oil.

3. The PRODUCTION SHARING AGREEMENT (PSA) is a more complex system...The first proportion of oil extracted is then allocated to the company, which uses oil sales to recoup its costs and capital investment – the oil used for this purpose is termed ‘cost oil’. There is usually a limit on what proportion of oil production in any year can count as cost oil. Once costs have been recovered, the remaining ‘profit oil’ is divided between state and company in agreed proportions. The company is usually taxed on its profit oil. There may also be a royalty payable on all oil produced.


In the minds of some neo-conservatives, writing on Iraqi oil before the war, privatisation meant the transfer of legal ownership of Iraq's oil reserves into private hands. However, in all countries of the world except the USA (a), reserves (prior to their extraction) are legally the property of the state. This is the case in Iraq, and remains so under the new Constitution. There has never been a realistic prospect of US-style privatisation of Iraq’s oil reserves. But this does not mean that private companies would not develop Iraq’s oil.

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Friday, November 25, 2005

REUTERS: How big OIL will steal Iraq's wealth

This is somewhat technical, but the gist of it is that oil companies are still working on ways to screw Iraq.

The original plan was to privatize the oil rights and sell them off, completely cutting Iraqis out of the deal. This new proposal is more in line with how oil companies and other multi-national corporations screw the developing world.

If anybody was really concerned about fighting terrorism, they wouldn't do stuff like this.

But they aren't.

For more on Iraq's oil, see:



Big oil has crude designs on Iraq wealth - report
Tue Nov 22, 2005 5:51 AM GMT

Big oil firms may rob Iraq of billions and grab control of its oilfields unless ordinary Iraqis can have a greater say in how their country's riches are tapped, U.S. and British campaigners said on Tuesday.

Big oil is being lured by the Production Sharing Agreement (PSA), promoted by Washington and London, which gives them huge returns on investment, but deprives Iraq of up to $194 billion (113 billion pounds), according to "Crude Designs: The rip-off of Iraq's oil wealth".

"Under the influence of the U.S. and UK, powerful politicians and technocrats in the Iraqi oil ministry are pushing to hand all Iraq's undeveloped fields to multinational oil companies, to be developed under production sharing agreements," said Greg Muttitt, the report's author.

For international oilmen, deprived access to vast Iraqi reserves for decades, long-term PSAs offer the ability to book reserves, protection from future adverse legislation and healthy profits during low oil prices.

If only the contracts were as lucrative for average Iraqis, still suspicious that the oil was the motive behind the U.S.-led war in 2003, said the report.

The massive loss from PSAs would amount to $2,800 to $7,400 per Iraqi adult over the 30-year lifespan of a typical deal, it said. By comparison, Iraqi GDP is now only $2,100 per person.


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Tuesday, November 22, 2005

BRIT MEMO: Bush wanted to bomb TV news in Arab ally country

I just heard this on Democracy Now, the best hour of news on the radio.

Bush wanted to bomb the headquarters of al-Jazeera, the Arab equivalent of the BBC, outside the combat zone in our ally Qatar.

This is disturbing for a couple of reasons.

Al-Jazeera's headquarters in Afghanistan and Iraq were hit by US air strikes. The incident on Iraq was caught on film. A reporter was on the roof of the Palestine hotel where most reporters in Baghdad stay. He was surrounded by satellite dishes with network logos on them. He saw and the camera caught an A-10 strafing across the river then turn toward him. He couldn't finish his commentary because he was shot by one of the milk bottle sized rounds of the A-10.

You can see the incident in the film CONTROL ROOM. The network producers were despondent; they couldn't figure out how this happened since they gave coalition forces their coordinates--just like they had in Afghanistan.

Also, more journalists have been killed during the two and a half years of the Iraq War than in all of Vietnam.

Both could be unhappy coincidences, and death of reporters could be the result of insurgent actions (though it would be to their advantage to let reporters see what's going on there), but this story makes both seem more like part of a pattern of controlling the news by killing the messenger. Literally.

At some point, Congress needs to set the policy for how journalists are treated in the combat zone and NOT leave it to the president and Pentagon to decide. As much as possible, the First Amendment should follow the flag.

Take a look at the Al Jazeera website and decide for yourself how many people should be killed for this kind of reporting:

The al-Jazeera coverage of this story:

You can also see an a summary of attacks on journalists at Reporters without Borders:

What does the rest of the world think of us when we spread democracy and freedom by killing those who practice it?

22 November 2005

Madness of war memo
By Kevin Maguire And Andy Lines

PRESIDENT Bush planned to bomb Arab TV station al-Jazeera in friendly Qatar, a "Top Secret" No 10 memo reveals.

But he was talked out of it at a White House summit by Tony Blair, who said it would provoke a worldwide backlash.

Yesterday former Labour Defence Minister Peter Kilfoyle challenged Downing Street to publish the five-page transcript of the two leaders' conversation. He said: "It's frightening to think that such a powerful man as Bush can propose such cavalier actions.

At the time, the US was launching an all-out assault on insurgents in the Iraqi town of Fallujah.

Al-Jazeera infuriated Washington and London by reporting from behind rebel lines and broadcasting pictures of dead soldiers, private contractors and Iraqi victims.

The station, watched by millions, has also been used by bin Laden and al-Qaeda to broadcast atrocities and to threaten the West.

Dozens of al-Jazeera staff at the HQ are not, as many believe, Islamic fanatics. Instead, most are respected and highly trained technicians and journalists.

In 2001 the station's Kabul office was knocked out by two "smart" bombs. In 2003, al-Jazeera reporter Tareq Ayyoub was killed in a US missile strike on the station's Baghdad centre.


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Sunday, November 13, 2005

Grinch 2005: You're a mean one, Mr. Bush

MoPaul posted the above artwork and his verses at

MoPaul's Post

The Professor Smartass verses:

You're a coward, Mr. Bush...

Your daddy was a pilot,
was shot down in the Great War,
that really must have scared you
so you never left our shore
We had a hot war raging
but you faced the Mexican Air Corps,
Even then you couldn't show up
and stopped at the liquor store,
Mr. Bush...

You even fear real questions
from old ladies and boy scouts.
Before you go in public
fat Karl picks the critics out.
He's sees a bumper sticker that says Kerry or Gore,
He calls the Secret Service and that traitor is no more,
Mr. Bush...

When Cindy came to see you
you ran away in fear.
When a soldier dies,
you don't even shed a tear...
You'd like to sell the bodies
harvest kidneys, hearts, and ears,
Mr. Bush...

You're no Santa, Mr. Bush...

You say you're cutting taxes
but it's only for the rich
You scratch a corporation
before it even has an itch...

But when the poor need healthcare
you tell them not to bitch
If they want to go to college
they must kill Arabs in a ditch

When black folks were a-drowning
you though you got your wish
Cause you'd go through their pockets
then feed them to the fish,
Mr. Bush...

You're a liar, Mr. Bush...

When the towers were hit on 9/11
you said you didn't know
but the only thing you didn't
was which specific floor,
Mr. Bush...

Your friends they owned the buildings
and cleaned up all the mess.
They made the bombs and bullets
to split the Arabs chests,
No matter what disaster,
they'll profit in excess
Mr. Bush...

You said Saddam had nukes,
and he'd make our children die,
Then just a few months later,
You did a skit about your lie.
You made reporters laugh, and Iraqi mothers cry,
Mr. Bush...

You said Saddam was bad,
that he tortured and was vile,
and Rummy ought to know
cause he shook his hand and smiled.

You knew his words on weapons,
were only a deceit.
Cause when your daddy sold them
he kept a damn receipt.

You said Saddam invaded
his old neighbor Iran
But we gave him all the bullets
and said that plan was grand

And now you'd like to show him
how to kill those Shi'ites right.
Uncle Dick would like to nuke them
and take their oil without a fight
He hides in a dark hole
and only fresh oil lures him,
that pasty heartless troll,
Mr. Bush...

Mo at MoPaul's Post

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Friday, November 11, 2005

Powell aide says war about OIL so we can't leave

Colin Powell's chief of staff has been speaking out on the workings of the Bush administration, and confirming what critics on the left have been saying about Bush since the beginning: that they have subverted the way our government works, and that the checks and balances which Bush ignores are actually needed for our security.

More importantly though, he openly acknowledges the significance of OIL in the decision-making process to go to war and why policy-makers will not seriously consider a pullout, regardless of their public statements or party affiliation.

This article also recounts what Former Bush Treasury Secretary John O'Neill said about the extent of the oil planning before the war and even before 9/11.

Totally apart from whether we should stay in Iraq or go, it's a sad comment on our democracy that NONE of the real debate is going on in public, not by the rubber stamp republican congress, and not even by the supposed opposition Democrats.

I don't know what good it does, but I'm going to send this to every Democratic senator and bust their balls about lying to us as much as the Republicans do on Iraq.


So Iraq Was About the Oil

By Robert Parry

November 8, 2005

While bemoaning the administration’s incompetence in implementing the war strategy, Wilkerson said the U.S. government now had no choice but to succeed in Iraq or face the necessity of conquering the Middle East within the next 10 years to ensure access to the region’s oil supplies.

“We had a discussion in (the State Department’s Office of) Policy Planning about actually mounting an operation to take the oilfields of the Middle East, internationalize them, put them under some sort of U.N. trusteeship and administer the revenues and the oil accordingly,” Wilkerson said. “That’s how serious we thought about it.


Active preparations for war with Iraq were soon underway. Behind the scenes, O’Neill said he watched as the administration refined its plans for how to divvy up Iraq’s oil reserves after the invasion.

“Documents were being prepared by the Defense Intelligence Agency, (Defense Secretary Donald) Rumsfeld’s intelligence arm, mapping Iraq’s oil fields and exploration areas and listing companies that might be interested in leveraging the precious asset,” Suskind wrote in The Price of Loyalty.


On Feb. 3, 2001 – only two weeks after Bush took office – an NSC document instructed NSC officials to cooperate with Cheney’s Energy Task Force because it was “melding” two previously unrelated areas of policy: “the review of operational policies towards rogue states” and “actions regarding the capture of new and existing oil and gas fields.”




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Friday, November 04, 2005

GOP Memo calls religious right "wackos"

This is why abortion won't be overturned: the GOP is using it to drive people to the polls. Unfortunately, Democrats often play this game with left wing cultural window dressing while screwing us on economic issues too.


Abramoff-Scanlon School of Sleaze

By Michael Scherer memo highlighted in a Capitol Hill hearing Wednesday that Scanlon, a former aide to Rep. Tom DeLay, R-Texas, sent the Coushatta Tribe of Louisiana to describe his strategy for protecting the tribe's gambling business. In plain terms, Scanlon confessed the source code of recent Republican electoral victories: target religious conservatives, distract everyone else, and then railroad through complex initiatives.

"The wackos get their information through the Christian right, Christian radio, mail, the internet and telephone trees," Scanlon wrote in the memo, which was read into the public record at a hearing of the Senate Indian Affairs Committee. "Simply put, we want to bring out the wackos to vote against something and make sure the rest of the public lets the whole thing slip past them." The brilliance of this strategy was twofold: Not only would most voters not know about an initiative to protect Coushatta gambling revenues, but religious "wackos" could be tricked into supporting gambling at the Coushatta casino even as they thought they were opposing it.

It's time to get our head out of our asses. School prayer, the flag, the Ten Commandments, aren't going to put food on the table, or get your kid medical care when he's sick. When we decide who to put on the Supreme Court and in elected office, we should be spending more time looking at how they are going to deal with corporate America than those other issues that are used primarily to get our panties in knot.

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Wednesday, November 02, 2005

***Democrats FIGHT BACK!!!***

These are excerpts from Senate Minority leader Harry Reid's statement, when he demanded that his Republican colleagues exercise their oversight duties instead of serving as a rubber stamp for the most corrupt, incompetent, and destructive president in our history.

Reid then forced the Senate into a closed session to discuss investigating the lies that led to the Iraq War.

The only element missing from this that would make it perfect is demanding that they tell the American people WHY the Bush administration had such a hard on to invade Iraq, a discussion that would make future oil wars far more difficult.

But after five years of turning in D- work, I'm still going to celebrate this A- minus effort.

Take a minute to send Harry Reid a postcard (letters get slowed checking for bio terror crap), a fax, or email thanking him for trying to restart our democracy.

Reid, Harry- (D - NV)
(202) 224-3542
(202) 224-7327 FAX
Web Form:



Tuesday, November 1, 2005

Washington, D.C. – Senate Democratic Leader Harry Reid delivered the following statement on the floor of the U.S. Senate calling for a secret session of the Senate.

“This past weekend, we witnessed the indictment of I. Lewis Libby, the Vice President’s Chief of Staff and a senior Advisor to President Bush. Libby is the first sitting White House staffer to be indicted in 135 years.

“The Libby indictment provides a window into what this is really about: how the Administration manufactured and manipulated intelligence in order to sell the war in Iraq and attempted to destroy those who dared to challenge its actions.

“What has been the response of this Republican-controlled Congress to the Administration’s manipulation of intelligence that led to this protracted war in Iraq? Basically nothing. Did the Republican-controlled Congress carry out its constitutional obligations to conduct oversight? No. Did it support our troops and their families by providing them the answers to many important questions? No. Did it even attempt to force this Administration to answer the most basic questions about its behavior? No.

“Unfortunately the unwillingness of the Republican-controlled Congress to exercise its oversight responsibilities is not limited to just Iraq. We see it with respect to the prisoner abuse scandal. We see it with respect to Katrina. And we see it with respect to the cronyism and corruption that permeates this Administration.

“Time and time again, this Republican-controlled Congress has consistently chosen to put its political interests ahead of our national security. They have repeatedly chosen to protect the Republican Administration rather than get to the bottom of what happened and why.

“There is also another disturbing pattern here, namely about how the Administration responded to those who challenged its assertions. Time and again this Administration has actively sought to attack and undercut those who dared to raise questions about its preferred course.

“This behavior is unacceptable. The toll in Iraq is as staggering as it is solemn. More than 2,000 Americans have lost their lives. Over 90 Americans have paid the ultimate sacrifice this month alone – the fourth deadliest month since the war began. More than 15,000 have been wounded. More than 150,000 remain in harm’s way. Enormous sacrifices have been and continue to be made.

“The troops and the American people have a right to expect answers and accountability worthy of that sacrifice.

“They also deserve a searching and comprehensive investigation about how the Bush Administration brought this country to war. Key questions that need to be answered include:

    * How did the Bush Administration assemble its case for war against Iraq?

    * Who did Bush Administration officials listen to and who did they ignore?

    * How did senior Administration officials manipulate or manufacture intelligence presented to the Congress and the American people?

    * What was the role of the White House Iraq Group or WHIG, a group of senior White House officials tasked with marketing the war and taking down its critics?

    * How did the Administration coordinate its efforts to attack individuals who dared to challenge the Administration’s assertions?

    * Why has the Administration failed to provide Congress with the documents that will shed light on their misconduct and misstatements?

“We demand that the Intelligence Committee and other committees in this body with jurisdiction over these matters carry out a full and complete investigation immediately as called for by Democrats in the committee’s annual intelligence authorization report. Our troops and the American people have sacrificed too much. It is time this Republican-controlled Congress put the interests of the American people ahead of their own political interests.”


DEMOCRACY NOW story on Reid's defibrililation of democracy in the Senate

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