Posts by James Bremner
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Iraq needs the oil in a hurry to fund its development. It doesn't have the time to develop a national oil company to do it all itself, that takes many, many years to build the skills and competencies. Wasting time taking that path really would be screwing the Iraqi people. Even in a national oil company structure, you would still need a lot of outside expertise and capital and probably end up with a contract structure that achieves the same result
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The Independent editorial is absolutely correct in part. The bit about the importance of honourable intentions of the US and the oil companies is absolutely correct. Unreasonable contracts would be a disaster of enormous proportions. Fortunately, based on the numbers and terms cited in the other Independent article, this does not appear to be the case.
The editorial is wrong with the implication that the US in trying to secure some control and reduce the mayhem in Baghdad is making the wrong decision. Iraq can't progress while Baghdad is out of control and the Iraqis can't seem to get it under control themselves, so what choice is there? The other option, withdrawal would leave a vacumn that would be filled by untold carnage. It is not a serious option. The Iraqi govt and Iraqis don't want an immediate withdrawal. Iran would love it.
What is it about too many people around the world and the international left that prevent them from seeing the obvious? That the last thing that US and the Bush administration wanted almost 4 years after OIF is still to have so many troop in Iraq and to have car bombs and what amounts to ethnic cleansing going on? But to walk out before the job is done would be a truly shameful thing to do.
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If US money is ending up supporting shite militias, it sure as hell is not the intention, unlike Iran.
As for stability. I dont think many Iraqis want to go back to the "stability" of Hussein's hellish regime. Disrupting that stability was a good, humane thing to do.
Denying or playing down Iran's role in the problems in Iraq ia a copout. Without the activities of the external parties, Al Qeada and Iran, Iraq would be much further along it path to a stable functioning society.
As for now, there is nothing the US would like to do more than create some stabilty and go home.
As for Iraqis wanting the US to leave, according to polls they want the US to leave after some stability has been achieved. Americans want that as much as Iraqis do.
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Simon,
Most deals are negotiated behind closed doors. No surprises there, or there shouldn't be.The terms of these deals were always going to become public knowledge at some stage, as they apparently have now. Any deal that sticks it to the Iraqis would cause a hell of a stink, as it should. If you are in the US govt or Exxon Mobil why on earth would you do that to youself? It makes no sense at all.
75% is being raked off only until capital costs are covered. As far as those captial cost are concerned, see previous point.
Exxon et al will make good money, as they should for the risk that they are taking. Iraq will get tonnes of money, as they should too, it is their oil. These deals should be looked at as a source of hope for the future of Iraq, not some dark source of evil.
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Simon,
So you think it is perfectly fine for Iran to support Shia death squads? -
Simon,
I read some of the report you linked to about the production sharing agreements that apparently some US and UK major oil companies are negotiating with the Iraqi government. Interesting report although one has to factor in the authors' point of view, which is not the least bit favourable toward any of the participants in the prospective deals. I also saw aa article based on the report in today's Independent.The deals seem reasonable to me for the following reasons:
Iraq needs massive (tens of billions of $) investment and expertise to develop its oil fields in a hurry so they can get more oil revenue flowing to fund Iraq's reconstruction. Who else but the super majors has the financial resources and technical expertise required? No one.
If you were an Iraqi, which companies would you want to deal with? Companies of the countries that liberated you from the nightmare of the Hussein regime (US, UK Aust etc) or companies from countries that either did nothing to support your liberation or would have left you to Saddam's tender mercies or even worse, done deals with Saddam (Russia, France China etc)?
Bearing in mind the risk of making multi billion dollar investments in an environment as uncertain as Iraq is now (will the US bail out of Iraq, will Iran get a nuke and use it etc?), the terms of the agreement do not seem onerous to me.
The oil companies get 75% of the revenue until their capital expenditure is recovered (hardly unreasonable), and get 20% thereafter, which conversely means that Iraq gets 80% thereafter.
The article and the report state that a 12% rate of return is more normal for this kind of deal, but 12% is barely twice the Fed funds rate (one of the numbers that could be used as a proxy for the "the risk free rate of return" in financial calculations).
An additional 6 and a bit% for all that risk? Are they kidding? Twenty % seems fair to me bearing in mind all the risk the oil companies will be bearing. There is a real risk that the whole thing will go up in smoke and they will lose all their capital investment. That risk has to be factored in to the return or you wouldn't do the deal. Also, consider what has happened to western oil companies in Venezuela, Bolivia and Russia recently. Bad shit does happen.
Based on my understanding of the contracts currently being negotiated between Iraq and US and UK major oils, my original point stands. Iraqis are in charge of and will benefit from their own resources. Good on them and good luck to them!!
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Simon,
Here is a link to an article that discusses an Iran Sunni insurgent link.
http://www.nysun.com/article/46032
"One example of a mindset that may hinder analysis of Iranian involvement is the belief that Iran would never have any dealings with militant Sunni Arabs. But they allowed hundreds of Al Qaeda operatives to escape from Afghanistan across their territory in 2002," he said.
Iran has also harbored Bin Laden's eldest son and many of the top Al Qaeda leaders since 9/11. My enemies enemy is my friend!!
Why wouldn't Iran support Sunni insurgents at this point in time? Iran's goal is to get the US out of Iraq and hopefully the region by making the US public tired of the daily chaos of Iraq, so the politicians pull the troops out (al la Vietnam), and things are moving in their direction at the moment. The US mid term elections were a win for Iran and this strategy. The last thing Iran wants right now is for Iraq to settle down and make progress, what better way to keep the chaos going than to support both sides? Makes perfect sense.
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Simon,
I have seen the 1 million figure in a few places, I will dig around and try to find some links. The last time I heard the range of 1 to 2 million depending on who you count, it was from James Woolsley, the former head of the CIA (1992 to 1994 I think).
I think I read the Iranian - Sunni insurgent link with reference to the 2 Iranian intelligence guys who were captured in Iraq last week or the week before.
I'ill dig around on the other stuff too. -
I read the Raazzaq and Hitchens articles, which were both fascinating, they added interesting specifics to the familiar narrative. It is a mess that only continued time and effort will resolve.
I find his "the Shites turned out and smiled and waved whenever Saddam went to the south" a bit hard to take at face value. Probably one of those "turn out and smile and wave for Saddam, and we wont shoot you or rape you wife and children" type of celebrations.
Neil, I disagree that Iran is not a major player in Iraq. Iran has been behind the Shite militias from the beginning and I read last week that Iran has been supporting the Sunnis as well. Their game plan is to create enough chaos to get the American public sick and tired of Iraq to get the politicians to pull out the US troops (a la Vietnam), but not so much chaos that Iraq implodes and pulls them into a regional conflict. So far you have to say that the Iranians are playing their hand very well, they are clever, make no mistake. Being able to create even more chaos in Iraq at virtually a moments' notice is a high cost the US has to consider if it wants to put more pressure on Iran over its nuke program as well.
It is one complicated ball of wax, that is for sure.
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Daniel,
The following para was in the article from wafb.
"If the figures remain steady, Peter Scharf, executive director of the Center for Society, Law and Justice at the University of New Orleans notes, that would mean a June-to-June rate of 105 killings per 100,000 residents."
I said in my original post that the comparison is not perfect, and as I live here I am well aware that there are no IEDs or death squads etc. in NOLA. But if you are dead, you are dead. How you died doesn't change the fact that you are dead.
To reiterate my previous post, the point was that you can have a lot of mayhem going on in a city or country and the city or country and its people can still function and go about their daily lives. I think that is a fair enough point.
I live here in NOLA and don't like the violence but it doesn't impact me or my family or our lives. Yes, we do live in a reasonable part of town, but we live in a regular house, not a gated community with guards and some of the murders have been only a couple of miles away (as people here have the right to bear arms and defend themselves, we don't have home invasions in the US. The deaths are mostly crack heads and dealers shooting at each other in the 'hood. As we don't buy or sell crack, we are not in any danger)
So in spite of all the carnage in Iraq, the country could still be functioning and moving forward, however haltingly (as the Newsweek article shows) to a better future than is has now or had under Hussein.
As for the Iraqi UN Ambassador, rather than disparage him, what parts of his comments do you think are unreasonable or inaccurate?
It seems that most of the estimates of the number of people that Saddam murdered range from 1m to 2m. It depends on whether you include soldiers in the Iran/Iraq war etc. Let’s take the low number of 1m. Saddam was in power from 1979 to 2003, 24 years or 288 months, so 1m dead equates to 3,472 dead per month, each month every month for 24 years. Or 41,667 dead each year, every year for 24 years, or twice that if you take the high estimate of 2m. And many of the deaths were after horrendous torture and brutality, the guy was a monster of extraordinary proportions. The world should be celebrating his death, not worrying about the last few minutes of his life and a bit of lip from a few Shites.