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Analysis: Iraq Oil Union Has Storied Past

by Ben LandoUPI Energy Correspondant
March 29th, 2007

WASHINGTON, March 29 (UPI) -- Hassan Jumaa Awad wants Iraq's oil to
stay under state control, and the unionists, who have long worked the
rigs, to be supported in developing the national resource. But this is
no request from the president of the Iraqi Federation of Oil Unions.

It's a demand.

"Since we are working to make progress in production, we need a real
participation in all the laws that are related to the oil policy,"
Awad told United Press International, speaking on his mobile phone
from the southern port city of Basra. "We are the sons of this sector
and we have the management and technical capability and we have the
knowledge on all the oil fields."

The IFOU represents more than 26,000 workers organized under various
unions in the oil-rich southern and northern areas of Iraq. Shiites,
Sunnis and Kurds, together they've operated Iraq's oil sector before,
during and after Saddam Hussein. Their rights to officially unionize
are still denied under a 1978 Saddam law, one of a few of the former
president's laws the U.S. occupation and the Iraqi Parliament upheld.

Iraq's oil production is still around 2 million barrels per day, down
from the 2.6 million bpd before the war, but far below its potential
since most of its 115 billion barrels of reserves are untapped.
Investment in the world's third-largest oil market is hampered by
conditions past and present, and an unknown future.

Saddam pushed certain oilfields too hard while neglecting maintenance
and new technologies. The sector was hit with war starting in 2003,
and now regular sabotage and a shortage of electricity.

Kurdish and central government negotiators reached a deal last month
on the framework for a law governing Iraq's oil. Details on ownership
rights and revenue sharing are still far from finalized. The Iraq
National Oil Co. would restart but compete with foreign oil companies,
who could win contracts giving them partial ownership of the
respective fields.

INOC "should have full privileges," Awad said, "and we don't agree on
the production partnership."

Iraq's oil has been nationalized for four decades. Iraqis view it with
a pride of ownership, something the law would reduce if the contract
language allowing for foreign ownership stands.

"We think that to reserve sovereignty of Iraq is to be able to control
the oil wealth," Awad said, and foreign investment should be limited
to technical assistance. "I wish if the foreign companies were to come
into Iraq, that they help us," Awad said. "Not to suck the blood of
the Iraqi people."

The unions were kept in the dark, as were most members of Iraq's
parliament, until the draft law was leaked to the media. Even then it
was still out the reach of most of Iraq's citizens.

"The discussion over the oil law was held very tightly between the
Bush administration and key representatives of the most influential
parts of Iraq's decision making authority," said Antonia Juhasz, an
analyst with Oil Change International and author of "The Bush Agenda:
Invading the World, One Economy at a Time."

"They are one of the only groups of concerned citizens in Iraq who's
had real access to information about the oil law," Juhasz said of the
IFOU. "They're able to represent opposition in a way that just isn't
possible for a vast majority, almost of all of regular Iraqis."

Oil unions led large strikes in the 1940s and 1950s. In the past four
years, Iraqi oil workers stopped work when they weren't being paid or
when a foreign subcontractor was hired to replace them. They only
threatened to strike after the Coalition Provisional Authority ordered
wages decreased. The Iraq Oil Ministry balked. This prompted other
unions, like dock workers in Umm Qasr and Zubair, to edge out foreign
corporations given contracts.

The IFOU could shut down Iraq's production if the draft hydrocarbons
law stands. With oil revenue funding 93 percent of the federal budget,
that's a large bargaining chip.

Oil workers could also whip up a critical mass of dissent in their communities.

"For the time being, people are busy with their day-to-day lives and
security," said Mohamed Zine, regional manger of Middle East at the
global energy analyst IHS. "I think it's easy in Iraq if you say that
foreign companies are stealing Iraqi oil, this message is easy to
spread."

The oil workers' popular support crosses sectarian lines.

Greg Muttitt of the London-based social and environmental justice
group Platform said sectarian conflict seen in Baghdad politics and
violence throughout the country was absent from a December meeting of
unionists in Amman, Jordan.

"There were Kurds, Sunni Arabs and Shiite Arabs present. The central
versus regional issue barely came up," Muttitt said. "Yet all agreed
in their strong opposition to privatization and production sharing.

"The central versus regional discussion has been most prominent
because the debate so far has only taken place between the political
elites, which are sectarianized," he said. "I don't think that's at
all representative of how ordinary Iraqis think."

Awad points to the aftermath of the invasion, when production dropped
to nearly nothing and the oil workers went right back to their black
gold trenches.

"Sectarian strife was never an issue that the workers knew, or know in
the current situation," Awad said. "They work. They produce. They
don't pay attention to violence or sectarianism."

--

(Hiba Dawood in New York and Adil Matloob in London contributed to this story.)