Global Policy Forum

By Claudia Parsons

A proposed law regulating Iraq's oil industry would foster U.S. "hegemony" over the world's third largest oil reserves and Iraqi oil workers are determined to oppose it, an Iraqi union leader said on Monday. Faleh Abood Umara, general secretary of the Southern Oil Company Union and the Iraqi Federation of Oil Workers' Unions, was speaking in New York as part of a U.S. tour to press for the withdrawal of foreign troops from Iraq.

Washington has been pressing Iraq's government to enact the law which the U.S. administration sees as a benchmark of progress toward national reconciliation more than four years after the invasion that ousted Saddam Hussein. Umara said the proposed law amounted to "a raid by the international oil cartel" and he said unions representing thousands of workers in the industry would take strong measures to oppose it, including strikes if necessary.

International firms are waiting for an energy law to regulate how the oil wealth would be distributed before they start pumping money into the country, where the oil industry was crippled by a decade of sanctions even before the war. "We think the proposed oil law doesn't serve the interests of the Iraqi people at all," Umara told a news conference in New York. "It emphasizes or confirms American hegemony over Iraqi oil fields." He said the proposed law favored foreign oil companies at the expense of Iraqi workers and would not guarantee enough of a share of the revenues to the Iraqi state.

The law was endorsed by the cabinet in February and was due to be passed by the parliament in May, but political wrangling has continued. Oil Minister Hussain al-Shahristani said in late May he expected it to be passed in the coming two months.

Umara said a key demand that sparked a strike earlier this month by oil workers in southern Iraq was to delay adoption of the oil law and renegotiate its terms. He described the strike as a "success" and said the government had agreed to form a committee including union leaders to resolve the problems with the law. "If this law is legislated, I'm sure that our union and other unions in Iraq will take a very strong position against it," Umara said. "We will take strong measures, even including stopping the flow of oil." "We are the ones who run the pumps to the ports and we also control the ports," he said. The strike by around 600 pipeline workers earlier this month did not effect crude oil exports. Basra, Iraq's second largest city and its gateway to the Gulf, has been the scene of a power struggle among Shi'ite factions seeking control of its oil wealth. Umara said the union was independent of any political faction.

With most oil reserves in Iraq in the Kurdish north and Shi'ite south, an equitable distribution of oil revenues is key to easing violence that has killed tens of thousands of Iraqis and more than 3,500 U.S. troops since the 2003 invasion. After years of sanctions, neglect and sabotage, the oil industry needs billions of dollars in investment to boost output and increase revenues to rebuild the economy. Oil production in Iraq is stuck at around 2 million barrels per day (bpd), well down on the nearly 3 million bpd hit in the final days of Saddam and even further from the 3.7 million bpd pumped in 1979, prior to the Iran-Iraq war.