Oil was supposed to build the new Iraq. Now, it's threatening to tear it apart

The plan was to use Iraq's huge reserves to fuel its economy and unite its people in prosperity.

It didn't work out like that. But Iraq's new rulers haven't given up hope.

America told the Iraqi government it would have to pass an oil law regulating the industry if it wanted to carry on getting US support.

The draft sitting in parliament will open the door to foreign investment and distribute oil revenues to each province according to its population.

It all sounds like a good idea. But ordinary Iraqis aren't convinced. And, who can blame them?

The new Iraq has meant rising fuel prices and long waits - some of these people have been waiting two days to fill their tanks.

And they don't think the new plans will make things better.


Interview with:

Jassem Mohammed - Petrol station manager

‘What will this bring us? How will this benefit us? If they divide up Iraq into independent provinces, and divide our oil, some areas that have high oil reserves will do well, others won't... if we are divided, we are lost... Iraq is one - if we had 4 or 5 Iraqs, then all is lost...

The conflicting interests of Iraq's Sunni, Shiite and Kurdish communities have paralysed the government... and make it unlikely the law will be passed anytime soon.



Much of Iraq's oil is in the Kurdish areas. The regional government has used it to fuel a mini-boom that makes its cities seem like another world compared to Baghdad.

But after suffering at the hands of Saddam's largely Sunni government, they aren't keen to share.


Iraq's Shia-led government wants to replicate the Kurdish region's success throughout the rest of the country. And it thinks spreading the oil-wealth is the key.


Interview with:
Hussein Shahristani - oil minister

All revenues from selling crude oil and gas will come into a centralised fund from where it will be distributed to regions according to population number.


But, with little oil in their own areas, the Sunnis know they are going to have to convince the Kurds and Shiites that it's in all their interests to be generous.



Interview with:

Alaa Mekki. Sunni politician-The National Accord Party

The National Accord Party was involved and is going to be involved in all the aspects and phases of discussion of the law... until we are satisfied that the law reflects the best possible outcome for the interests of the Iraqi people and until the law guarantees equal distribution of revenues, then we will back it completely... but until then, there has to be further study and improvements...


When America, first started gearing up for war in 2003, not only Iraqis but millions across the world thought it was oil Washington was really interested in.

The groups that first opposed the war see the oil law as the latest attempt to grab Iraq's resources.

The head of the Iraqi Federation of Oil Unions came to London to explain why his organisation opposes the law.


People entering conference in London

Speakers table


Interview with:
Hassan Juma, head of the Iraqi Federation of Oil Unions


We are against many aspects of this law including primarily the production sharing agreement, which gives too many benefits to the international oil companies. We think that it gives these companies control over Iraqi oil.

A poll by British NGO Platform found

91 percent of Iraqis felt they were not given enough information about the new oil law.

Sixty-three percent said they would prefer an Iraqi state oil firm to produce the country's reserves.

Most see the law as a betrayal by self-serving politicians.

People at newspaper stall

Jaafar Qaisi - Engineer

‘The politicians are in one world and the poor Iraqi people are in another."


Tape 4

Abu Hamza - Labourer

Where is the oil???? I want to ask the politicians... where are the generators? Where is the electricity??

I'm addressing the oil minister, who says he's an Iraqi who came to end our suffering. But where are the rights of the destitute? We are a people of suffering.


And it's the poor who suffer the most. Soaring feul bills force Iraqis like Umm Hussein to resort to desperate measures

Umm Hussein fills oven with plastics and sets it alight.

Umm Hussein - Housewife from Baghdad

"There is no firewood. Fuel is too expensive and my husband is unemployed. So, I don't have any other option. I can't buy gas."

"The smoke is black. It has chemicals. The bread tastes strange.

It's not like cooking it on firewood."

Shots of black smoke billowing out of the oven

One of the men who drew up the law says his original draft was meant to serve Iraqis like Umm Hussein before the politicians subverted his work.


Interview with:
Tariq Shafiq - Iraqi oil consultant

The famous word in Iraq today, which sets every political decision, is "muhasasa", which in English means mutual concessions - scratch my back and I'll scratch yours. And that has led to the calamity we're in - politically, economically, security wise - because the major parties will sit together and decide on major issues such and the petrol law with a view on the interests of the major parties and not necessarily of the whole country.

While a petroleum law is needed and I agree it's needed, you got to petroleum law to regulate and advance the building of capacity of production for Iraq. But this should not be done at any cost. Particularly, in view of the fact that there is so much insecurity, so much sad conditions of needs of the people, of water, electricity, insecurity, employment and this and that which exists in the country today. To a point where a government is not capable of doing its job of governing beyond the Green Zone.


Umm Hussein lives outside the Green Zone, and the government certainly isn't reaching her.


Umm Hussein taking bread out of the oven

While the politicians bicker over oil wealth that could rival Saudi Arabia, Umm Hussein bakes bread for her family by burning rubbish.

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