Focusing On The Non-Oil Sector - Part 18 - Iraq Is Getting Costlier To The US.

The Iraq project has become an extremely expensive undertaking for the US, with the war alone now costing almost $3 billion per week, up from $2 bn in 2005 and $1 bn in 2004 - as well as an average of two US casualties and 15 US wounded per day. The cost of the US gaining tribal allies in the Sunni Triangle to fight the Neo-Salafi insurgents and drive them out of Iraq is being budgeted at about $23 bn - no one knows how long this fund will last. Yet after more than 20 months of concentrated efforts, a proposed law for the petroleum sector has not materialised, and several other benchmarks required by the US for the political process in Iraq to move forward remain ink on paper.

Officials of Iraq's autonomous Kurdish Regional Government (KRG) say their own petroleum law, paving the way for IOC investment in their northern oil and gas fields, is irreversible. Their law gives the KRG the right to manage its petroleum wealth in the three northern governorates - Irbil, Sulaimaniyah and Dahuk - as well as "disputed territories" including Kirkuk, one of Iraq's largest crude oil production hubs (see Part 8 in ood2-IraqKurdOilLawAug27-07).

Rep. Dennis Kucinich, an Ohio Democrat running for president, on Sept. 19 called for an investigation into an oil E&P deal Hunt Oil of Dallas recently signed with the KRG. Hunt Oil's founder and CEO, Ray Hunt, is close to US President Bush. Kucinich said in a speech on the floor of the US House of Representatives the deal "raises questions" because of Hunt's ties to Bush. He also said a deal between a US firm and an Iraqi regional government undermined the US policy to stand up the federal government.

Kucinich and a growing chorus of the anti-war movement say US policy in Iraq is geared at breaking up the long nationalised petroleum sector. Iraqi politics over oil policy are at a standstill over just this issue, whether the federal government or provinces can sign E&P deals and to what extent foreign/private firms should be allowed access. Kucinich, one of the most vocal congressional critics of the Iraq war, especially as it concerns fears that Iraq's vast oil reserves played some role in the war's motive, has called for a congressional investigation into any role the Bush administration played in the Hunt Oil deal.

Ray Hunt was appointed by Bush twice to the President's Foreign Intelligence Advisory Board, which Kucinich said had access to intelligence and experts acknowledge useful for companies such as Hunt Oil.