Ladies and gentlemen, members of the European Parliament, ladies and gentlemen who are present here, at last, I was able to see Emma Nicholson by face. I studied in England for a long time and I was a member of the Labour Party. I always followed the politics there. And before the invasion and occupation of Iraq, I vividly remember two women, Anne Clwyd and Emma Nicholson. I’ve seen Anne Clwyd before and now I’ve seen Emma Nicholson. I hope that they will endorse our problems and not just their agenda. 

Now, we come to the importance of Iraqi oil. Iraqi oil, ladies and gentlemen, Iraq is a major oil country. It has, actually, the third largest reserves of oil in the world. Some people say it is the second, because there are doubts about the Iranian figure of reserves. If the probable reserves of Iraq, which is 214 billion barrels, is added to the approved reserves, which 115 barrels of today, Iraq will become first oil reserve country in the world. It is the most underexplored country as far as oil is concerned in the world. It produces the least ratio of reserve of a production to reserves of the world, what I mean, that with a 115 billion barrels of reserves Iraq should be in the production a bracket between 6 to 8 barrels a day. Iraq, in all its history, never achieved more than 3.5 million barrels a day in 1979. Was Iraqi oil one of the reasons of the occupation? Well, I’m not fair if I say it is the only reason, but it must have been a very prominent reason. Because, towards the end of 2002 it was realised that when the sanctions on Iraq were not working, they was eroding, the whole UN infrastructure was under a threat by objections to that sanctions, so it should be lifted and lifted quickly. If the sanctions were lifted quickly and the regime of Saddam Hussein was still intact, it means Saddam Hussein will have the power to spend the money that is in the revenue obtained from oil. 

The experience of 1991 shows that the Iraqi people, given money, can reconstruct their country very quickly, whether they agree with the leadership of Saddam Hussein or they don’t. They will rebuild their country, they will move on and then Iraq will become again a major force. But then, it will become a major force in the area under the power of Saddam Hussein and that was (Arabic) or whatever you call it, and that was not acceptable to the West.  

Iraq, because it was weakened during the sanction years, fourteen years of sanctions, and because of the destruction of part of its infrastructure, especially the military infrastructure, it was ready to fall by a small force of occupying power and to prove it 50 to 60 thousand American soldiers walked from the Kuweiti border all the way to Iraq. So, let’s occupy this country. But what did this occupation result into? The Americans and the occupying powers thought they will keep the oil industry intact and I have to tell you, they did not bomb any oil installation. To keep it intact.  

But, what happened after the occupation was an extensive looting an pillage that destroyed a lot of equipment and systems that deal with oil production. The damage was so bad that, two months before the war were producing 2.8 million barrels per day on average and we haven’t achieved that figure till today, six years after the occupation. It’s still hovering between 2.3 and 2.4 million barrels per day. Iraq, in 1991, when it invaded Kuweit and was forced out, it had to pay compensation for Kuweit. One of the biggest bill of compensation was called the oil opportunity compensation, which Iraq paid; 11 billion dollars to Kuweit, to compensate for the lost opportunity of six months during Iraqi occupation that they didn’t produce oil as much as they would have to if there was no invasion. If that same formula is applied now to Iraq by the end of 2008 and Iraq was not invaded and kept producing 2.8 million barrels a day, what it was producing before the war, minus what it actually produced over these six years, Iraq has lost 53 billion dollars on the same basis of compensation. And if we calculate the amount of oil that was smuggled over these six years under the watchful eye of the man on the deck, which are the collision forces, it would be 11 billion dollars. These are income, this is money for the Iraqi people who you’ve seen its hospitals, its schools, the state of infrastructure. 

I remember a story my nephew was telling me before the invasion; why are you worried, uncle? It’s America coming. You get engineers with laptops and they press a button and the power station is build. They press another button and a refinery will be build and they press another button... Until now there is no refinery build, no power station build over six year, although tons of dollars went into what is called reconstruction programme. The situation is so bad that during the fourteen years of sanction, we did not import one drop of oil products, actually we exported gasoil to Jordan, to Turkey, to Syria, liquified petroleum gas to Syria, fuel oil to all neighbouring countries. Of course we exported these products outside of the UN umbrella. But the fact is that we did, we exported and we satisfied local demands at very cheap prices.  

Now, at fifteen times the prices that were prevalent then, we import today 5 million litres of gasoline a day, 1000 tons of liquified petroleum gas a day to satisfy the population and the prices are fifteen times what it used to be before the sanctions. I’m not trying to justify policies or anything, but these are facts, these are data in a front office. I wish Iraq all success with the oil industry, but these are facts. During these six years, they promised multiple governments that we were going to increase production, oil production. How are we going to do that? They said; we bring international oil companies to do this.  International oil companies are not today operating in Iraq, not because of lack of will of the collision forces or the Iraqi government, but because of the security situation on the ground, that prevented them from coming, so they did not conclude any grounds for that.  

Prior to the occupation, there was a committee, called the Iraqi Oil Committee, met in the USA with the US State Department and to produce a plan to practically sell all the Iraqi oil industries to international oil companies. The culmination of that plan was to produce an oil and gas law to govern this. They tried two years ago, they could not succeed. They did not even send it to the parliament, that we are saying it is an emergency democracy, they are even afraid to send it to their own parliament to look into it. 

At the moment, there are, because the security situation has improved a bit and because the international companies might come to Iraq, you see the race, you see the model. There is one accelerated plan on the table to be implemented by the Iraqi’s. There is a long term service contract to be concluded with international oil companies on the table, what is called the first and the second bidding round. There is the ... advocating full opening of the Iraqi oil industry to production sharing type of investment. These three types of contracts cover the same fields. Can you see the model? Now is starting the real fight between the people who are controlling Iraq today about the division of the cake of the Iraqi oil industry, simply because it may be feasible that international oil companies might come into Iraq.  

I’m not against international oil companies. I grew up within the range of the Iraqi Petroleum Company, the IPC. I was send on a IPC -scholarship to study in Britain.  I am not against that, but what I am against is that Iraq political situation is not fully settled, Iraqi functions are outside the political process, there is the debaathification law, segregation against a lot of people, half the army is sacked without paycheck, therefore we should not commit ourselves, Iraq, never commit itself to 25-year-contracts, under the present circumstances. Let us do short term contracts, let us rebuild our refineries, let us buy equipment, but no 25-year-contracts, until there is a revision of the constitution, which we were promised 4 years ago, there is a national reconciliation, which we were promised for years and unless there is a consensus that who is ruling us represents our adequate majority. 

Thank you very much.

Dr. Faleh Al-Khayat.

Brussels, Belgium.

March 18^th, 2009.

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