Deals With Iraq Are Set to Bring Oil Giants Back

Moises Saman for The New York Times

Oil fields in the Iraqi province of Basra. Iraq produces about 2.5 million barrels of oil per day.

BAGHDAD — Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.

The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.

The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.

Sensitive to the appearance that they were profiting from the war and already under pressure because of record high oil prices, senior officials of two of the companies, speaking only on the condition that they not be identified, said they were helping Iraq rebuild its decrepit oil industry.

For an industry being frozen out of new ventures in the world’s dominant oil-producing countries, from Russia to Venezuela, Iraq offers a rare and prized opportunity.

While enriched by $140 per barrel oil, the oil majors are also struggling to replace their reserves as ever more of the world’s oil patch becomes off limits. Governments in countries like Bolivia and Venezuela are nationalizing their oil industries or seeking a larger share of the record profits for their national budgets. Russia and Kazakhstan have forced the major companies to renegotiate contracts.

The Iraqi government’s stated goal in inviting back the major companies is to increase oil production by half a million barrels per day by attracting modern technology and expertise to oil fields now desperately short of both. The revenue would be used for reconstruction, although the Iraqi government has had trouble spending the oil revenues it now has, in part because of bureaucratic inefficiency.

For the American government, increasing output in Iraq, as elsewhere, serves the foreign policy goal of increasing oil production globally to alleviate the exceptionally tight supply that is a cause of soaring prices.

The Iraqi Oil Ministry, through a spokesman, said the no-bid contracts were a stop-gap measure to bring modern skills into the fields while the oil law was pending in Parliament.

It said the companies had been chosen because they had been advising the ministry without charge for two years before being awarded the contracts, and because these companies had the needed technology.

A Shell spokeswoman hinted at the kind of work the companies might be engaged in. “We can confirm that we have submitted a conceptual proposal to the Iraqi authorities to minimize current and future gas flaring in the south through gas gathering and utilization,” said the spokeswoman, Marnie Funk. “The contents of the proposal are confidential.”

While small, the deals hold great promise for the companies.

“The bigger prize everybody is waiting for is development of the giant new fields,” Leila Benali, an authority on Middle East oil at Cambridge Energy Research Associates, said in a telephone interview from the firm’s Paris office. The current contracts, she said, are a “foothold” in Iraq for companies striving for these longer-term deals.

Any Western oil official who comes to Iraq would require heavy security, exposing the companies to all the same logistical nightmares that have hampered previous attempts, often undertaken at huge cost, to rebuild Iraq’s oil infrastructure.

And work in the deserts and swamps that contain much of Iraq’s oil reserves would be virtually impossible unless carried out solely by Iraqi subcontractors, who would likely be threatened by insurgents for cooperating with Western companies.

Yet at today’s oil prices, there is no shortage of companies coveting a contract in Iraq. It is not only one of the few countries where oil reserves are up for grabs, but also one of the few that is viewed within the industry as having considerable potential to rapidly increase production.

David Fyfe, a Middle East analyst at the International Energy Agency, a Paris-based group that monitors oil production for the developed countries, said he believed that Iraq’s output could increase to about 3 million barrels a day from its current 2.5 million, though it would probably take longer than the six months the Oil Ministry estimated.

Mr. Fyfe’s organization estimated that repair work on existing fields could bring Iraq’s output up to roughly four million barrels per day within several years. After new fields are tapped, Iraq is expected to reach a plateau of about six million barrels per day, Mr. Fyfe said, which could suppress current world oil prices.

The contracts, the two oil company officials said, are a continuation of work the companies had been conducting here to assist the Oil Ministry under two-year-old memorandums of understanding. The companies provided free advice and training to the Iraqis. This relationship with the ministry, said company officials and an American diplomat, was a reason the contracts were not opened to competitive bidding.

A total of 46 companies, including the leading oil companies of China, India and Russia, had memorandums of understanding with the Oil Ministry, yet were not awarded contracts.

The no-bid deals are structured as service contracts. The companies will be paid for their work, rather than offered a license to the oil deposits. As such, they do not require the passage of an oil law setting out terms for competitive bidding. The legislation has been stalled by disputes among Shiite, Sunni and Kurdish parties over revenue sharing and other conditions.

The first oil contracts for the majors in Iraq are exceptional for the oil industry.

They include a provision that could allow the companies to reap large profits at today’s prices: the ministry and companies are negotiating payment in oil rather than cash.

“These are not actually service contracts,” Ms. Benali said. “They were designed to circumvent the legislative stalemate” and bring Western companies with experience managing large projects into Iraq before the passage of the oil law.

A clause in the draft contracts would allow the companies to match bids from competing companies to retain the work once it is opened to bidding, according to the Iraq country manager for a major oil company who did not consent to be cited publicly discussing the terms.

Assem Jihad, the Oil Ministry spokesman, said the ministry chose companies it was comfortable working with under the charitable memorandum of understanding agreements, and for their technical prowess. “Because of that, they got the priority,” he said.

In all cases but one, the same company that had provided free advice to the ministry for work on a specific field was offered the technical support contract for that field, one of the companies’ officials said.

The exception is the West Qurna field in southern Iraq, outside Basra. There, the Russian company Lukoil, which claims a Hussein-era contract for the field, had been providing free training to Iraqi engineers, but a consortium of Chevron and Total, a French company, was offered the contract. A spokesman for Lukoil declined to comment.

Charles Ries, the chief economic official in the American Embassy in Baghdad, described the no-bid contracts as a bridging mechanism to bring modern technology into the fields before the oil law was passed, and as an extension of the earlier work without charge.

To be sure, these are not the first foreign oil contracts in Iraq, and all have proved contentious.

The Kurdistan regional government, which in many respects functions as an independent entity in northern Iraq, has concluded a number of deals. Hunt Oil Company of Dallas, for example, signed a production-sharing agreement with the regional government last fall, though its legality is questioned by the central Iraqi government. The technical support agreements, however, are the first commercial work by the major oil companies in Iraq.

The impact, experts say, could be remarkable increases in Iraqi oil output.

While the current contracts are unrelated to the companies’ previous work in Iraq, in a twist of corporate history for some of the world’s largest companies, all four oil majors that had lost their concessions in Iraq are now back.

But a spokesman for Exxon said the company’s approach to Iraq was no different from its work elsewhere.

“Consistent with our longstanding, global business strategy, ExxonMobil would pursue business opportunities as they arise in Iraq, just as we would in other countries in which we are permitted to operate,” the spokesman, Len D’Eramo, said in an e-mailed statement.

But the company is clearly aware of the history. In an interview with Newsweek last fall, the former chief executive of Exxon, Lee Raymond, praised Iraq’s potential as an oil-producing country and added that Exxon was in a position to know. “There is an enormous amount of oil in Iraq,” Mr. Raymond said. “We were part of the consortium, the four companies that were there when Saddam Hussein threw us out, and we basically had the whole country.”

Original here

"If the Detainee Dies, You're Doing It Wrong"

News: A Senate investigation uncovers how torture entered the military's post-9/11 playbook. By Brian Beutler, The Media Consortium

Over the objections of senior lawyers across the military, former Defense Secretary Donald Rumsfeld, acting on the advice of the Pentagon's General Counsel William "Jim" Haynes, approved the use of 15 harsh interrogation techniques on detainees held at the US detention center at Guantanamo Bay, Cuba.

Rumsfeld's December 2, 2002, decision has been widely reported, but the fact that the techniques he approved were heavily questioned just one month earlier—including by senior military officials in the Army, Navy, Air Force, and Marines—was revealed on Tuesday during a hearing held by the Senate Armed Services Committee.

"While it has been known for some time that military lawyers voiced strong objections to interrogation techniques in early 2003," said committee Chairman Carl Levin (D-Mich.), "these November 2002 warnings from the military services—expressed before the Secretary of Defense authorized the use of aggressive techniques—were not publicly known before now."

At the hearing, former defense officials, including Haynes and Richard Shiffrin, the Pentagon's onetime deputy general counsel for intelligence, as well as retired Lt. Colonel Daniel Baumgartner, faced tough questioning from Democratic members of the panel about their roles in institutionalizing those very techniques. According to documents distributed by the committee, Shiffrin, acting on Haynes' behalf in 2002, called upon Baumgartner, the former chief of staff at the Pentagon's Joint Personnel Recovery Agency, to provide military attorneys with a list of harsh interrogation methods that US soldiers are trained to withstand at JPRA's Survival Evasion Resistance and Escape (SERE) training schools. Both Shiffrin and Baumgartner denied knowing that the information they provided to Haynes would be used as the basis for detainee interrogations in three countries. Haynes said he could not recall the details of his role in the process.

Also testifying on Tuesday was retired Lt. Colonel Diane Beaver, who in October 2002 penned a legal opinion in which she "concluded that certain aggressive interrogation techniques...were lawful."

"I have been vilified by some because of it," she told the panel, "and discounted and forgotten by many others."

Under questioning from Sen. Lindsey Graham (R-S.C.) about the legal soundness of her memo, which paved the way for the use of techniques like waterboarding and sleep deprivation, Beaver, once a top military lawyer at Gitmo, demurred. "If I asked you if the UCMJ [Uniform Code of Military Justice] prohibited waterboarding, what would you say?" asked Graham, a former Air Force lawyer. "It's difficult to say," Beaver responded.

In that memo, though, Beaver writes that, in order to circumvent various legal prohibitions to techniques like waterboarding, "[i]t would be advisable to have permission or immunity in advance from the convening authority, for military members utilizing these methods." Nonetheless, her opinion, which panelist and former Navy General Counsel Alberto Mora described as "an inadequate treatment of very serious and sensitive issues," met almost no opposition from civilian and military officials and, for a short time, became the legal basis for the DOD's use of harsh interrogation tactics. In his testimony before the committee, Mora referred to the techniques as "cruel," saying they "could easily rise to the level of torture."

During a brief recess, I asked Mora how the US government can mitigate the harm done to the country's world standing by these policies, and how best to hold the architects accountable for their actions. Mora suggested that government leaders need to "create a common language with our allies that goes beyond the protections of Geneva," referring to the United Nations Agreements on Human Rights known as the Geneva Conventions. How to hold former public officials accountable for implementing these methods, he added, "is a difficult question. Politically speaking, achieving an agreed-upon framework with our allies going forward may require forgiving past transgressions. And that's a concern. That's a problem."

In his opening statement—an unusually long and thorough one for a congressional hearing—Levin provided an exhaustive history of the origins of the government's program of torturing prisoners at Guantanamo Bay, a program which later spread to Afghanistan and Iraq.

In 2002, senior Pentagon officials, including Shiffrin, sought and received information from Baumgartner about techniques used at SERE. At those facilities, members of the military are subjected to mock interrogations, to prepare them for the possibility of capture—and potentially, torture—by an enemy regime.

The schools' training program, which, at some facilities, includes the use of waterboarding, quickly became the practical basis for the department's own methods of interrogating prisoners at Guantanamo. Under questioning from Sen. Joe Lieberman (I-Conn.), Shiffrin admitted that "there was probably some discussion at some point about 'reverse engineering' SERE techniques." And, indeed, on December 30, 2002, two Navy SERE instructors arrived in Cuba to teach approximately two dozen interrogation personnel how to question detainees. Some of those trained by the SERE teachers were later instructed by their own superiors not to use those methods. Others were not.

Once approved for use in Guantanamo, the SERE techniques were forwarded to US military officials in Afghanistan and shown to interrogators in January 2003, just one month after Rumsfeld allowed them. Several weeks later, after the Iraq War had begun, the techniques became standard operating procedure for all US forces there, including those stationed at Abu Ghraib.

A month after he greenlighted them, Rumsfeld rescinded his approval of the 15 techniques, at least in part because of objections Mora brought to Haynes. But, just as quickly, Rumsfeld established a "working group" to examine interrogation techniques and create a legal framework that would protect military and defense officials from reprisals in the event that their conduct was later deemed to be torture. Shortly after the working group completed its report, Rumsfeld authorized another set of techniques—24 in all—and this time he included some wiggle room: "If, in your view," Rumsfeld wrote, "you require additional interrogation techniques for a particular detainee, you should provide me...a written request describing the proposed technique, recommended safeguards, and the rationale for applying it with an identified detainee."

It's difficult, therefore, to know precisely what limits governed Pentagon-approved interrogations for months thereafter. But if the agency took the advice of the CIA, there may have been very few restrictions. On October 2, 2002, senior CIA attorney Jonathan Fredman met with staff at Guantanamo to discuss harsh interrogation. "It's basically subject to perception," Fredman said, according to minutes of the meeting. "If the detainee dies, you're doing it wrong."

Photo by flickr user burge5000 used under a Creative Commons license.

Brian Beutler is the Washington correspondent for the Media Consortium, a network of progressive media organizations, including Mother Jones.

Original here

Study links hours in front of TV to obesity

The Canadian Press

TORONTO -- Canadians who are spending lots of their leisure time in front of screens -- especially TV screens -- are more likely to be obese, a new study suggests.

It's been known for awhile that rising screen time, as it's called, is contributing to childhood obesity. But this study, drawing from data in Statistic Canada's Canadian Community Health Survey, is one of the first looking to see if there is a link between screen time and obesity among Canadian adults.

And there appears to be.

Adults who watch more than 21 hours of TV a week were 80 per cent more likely to be obese than people who watched five hours or less television. Men who spent a lot of their leisure time in front of a computer screen were 20 per cent more likely to be obese and women were 30 per cent more likely than people who didn't send much time in front of a computer.

"From this, we would suggest that decreasing television viewing time in particular may be to the advantage of people at risk of overweight or obesity,'' said Mark Tremblay, one of the authors and the director of the Healthy Active Living and Obesity Research Institute at the Children's Hospital of Eastern Ontario in Ottawa.

The study, based on a survey of 42,600 men and women aged 20 to 64, found that in 2007, nearly three out of every 10 Canadian adults reported they watched an average of 15 or more hours of television a week and nearly two in 10 said they watched 21 or more hours a week.

Frequent leisure time computer use was less common, with about 15 per cent of adults reporting they averaged 15 or more hours a week at their computers. Only six per cent reported 21 hours or more a week of leisure computer screen time and nearly a third said they spent none of their leisure time in front of a computer screen.

The survey also asked about time spent reading, to see if sedentary behaviour in general raises the risk of obesity, or if there is something particular about TV and computer screen time that increases the likelihood a person will be obese.

Interestingly, rates of obesity were not higher among people who spent a lot of their leisure time reading than among infrequent or non-readers.

The researchers can't say why they saw the pattern they did. Because of the way the study was designed, it can't answer questions about cause and effect. It can only point out that there are associations between increased screen time and weight.

But obesity experts have a number of theories, including the overt prompting one gets to eat in commercials and the subliminal prompting of watching characters eating or drinking.

Another factor is that when people do eat in front of a screen, it is generally mindless repetitive eating, where a person goes through a bowl of chips without thinking or eats a handful of cookies instead of just one.

And people eating while watching TV generally don't scarf down steamed broccoli or celery sticks.

"Watching television is associated with snacking and often with foods that aren't of the best nutritional value,'' said Tremblay's co-author, Statistics Canada senior analyst Margot Shields.

"Chips and Coke and things that aren't of the best nutritional value.''

Another possibility is the low metabolic rate associated with TV viewing, the study said.

People watching TV expend only marginally more energy than people who are sleeping. Even playing a board game or typing on a computer keyboard raise the metabolic rate more, the authors noted.

Original here