Iraqi Oil Minister accused of mother of all sell-outs.

There are protests in Iraq concerning the Iraqi governments decision to allow foreign oil companies a stake in its giant oilfields in a desperate effort to raise declining oil production and revenues.

In less than two weeks, on 29 and 30 June, the Iraqi Oil Minister, Hussain Shahristani, will award service contracts to the world's largest oil companies to develop six of Iraq's largest oil-producing fields over 20 to 25 years.

Senior figures within the Iraqi oil industry have denounced the deal. Fayad al-Nema, the director of the South Oil Company, which comes under the Oil Ministry and produces most of Iraq's crude, said on the weekend: "The service contracts will put the Iraqi economy in chains and shackle its independence for the next 20 years. They squander Iraq's revenues." Mr Nema is reported to have since been fired because of his opposition to the contracts, which he says is shared by many other officials in Iraq's state-owned oil industry.

The government maintains that it is not compromising the ownership of Iraq's oil reserves – the third largest in the world at 115 billion barrels – on which the country is wholly dependent to fund its recovery from 30 years of war, sanctions and occupation.

But the fall in the oil price over the past year has left the government facing a financial crisis; 80 per cent of its revenues go to pay for salaries, food rations and recurrent costs. Little is left for reconstruction and the government is finding it hard to pay even for much-needed items such as an electrical plant from GE and Siemens.

The development of Iraq's oil reserves is of great importance to the world's energy supply in the 21st century. They may be even larger than Saudi Arabia's, as there was little exploration while Iraq was ruled by Saddam Hussein. International oil companies are desperate to get their foot in the door.

"Everyone wants to be in Iraq," says Ruba Husari, an expert on Iraqi oil. "Together with Iran, this is the only oil province in the world that has great potential. It is a great opportunity for oil companies because nobody knows the size of Iraq's reserves. Iraq itself needs to know what is under its soil."

Please remember that only the deepest cynic would think that this war was about oil. It's a total coincidence that the country which the US invaded - Iraq - and the country which the neo-cons are always threatening to attack - Iran - are the two countries with the greatest potential in unknown oil reserves.

Noam Chomsky:

Well, the first thing that should be done in Iraq is for us to be serious about what's going on. There is almost no serious discussion, I'm sorry to say, across the spectrum, of the question of withdrawal. The reason for that is that we are under a rigid doctrine in the West, a religious fanaticism, that says we must believe that the United States would have invaded Iraq even if its main product was lettuce and pickles, and the oil resources of the world were in Central Africa.

Anyone who doesn't believe that is condemned as a conspiracy theorist, a Marxist, a madman, or something. Well, you know, if you have three gray cells functioning, you know that that's perfect nonsense.

We are now being asked to ignore what is right in front of our faces. The Iraqi people are angry because they now see the exploration of their oil fields being handed over to foreign companies.

But we mustn't think that this war was in any way related to Iraq's oil reserves, that would be to engage in crazy talk.

It's simply a dreadful coincidence that, if this war were about oil, it would look exactly as things look now.

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Tags: Iraq, Iran, Iraq war, oil, neo-cons