The oil game in Iraq may be almost up. On September 29th, like a landlord serving notice, the government of Iraq announced that the next annual renewal of the United Nations Security Council mandate for a multinational force in Iraq - the only legal basis for a continuation of the American occupation - will be the last. That was, it seems, the first shoe to fall. The second may be an announcement terminating the little-noticed, but crucial companion Security Council mandate governing the disposition of Iraq's oil revenues.  

By December 31, 2008, according to Foreign Minister Hoshyar Zebari, the government of Iraq intends to have replaced the existing mandate for a multinational security force with a conventional bilateral security agreement with the United States, an agreement of the sort that Washington has with Kuwait, Saudi Arabia, and several other countries in the Middle East.  

The Security Council has always paired the annual renewal of its mandate for the multinational force with the renewal of a second mandate for the management of Iraqi oil revenues. This happens through the "Development Fund for Iraq," a kind of escrow account set up by the occupying powers after the overthrow of the Saddam Hussein regime and recognized in 2003 by U.N. Security Council Resolution 1483. The oil game will be up if and when Iraq announces that this mandate, too, will be terminated at a date certain in favor of resource-development agreements that - like the envisioned security agreement - match those of other states in the region. 

Is It Game Over For US Control Of Iraqi Oil? 

meanwhile ….. 

BP PLC is taking a multimillion dollar broom to sweep away a slew of federal charges linked to energy price fixing, a deadly refinery blast and pipeline leaks and focus on its energy business. 

The more than $373 million in settlements announced Thursday are part of the company's attempt to get rid of the problems left over from the stewardship of former chief executive John Browne and move ahead with the recently announced restructuring of Europe's second-largest oil company. 

On top of the fines and restitution, four former BP employees were indicted by a federal grand jury in Chicago on 20 counts of mail and wire fraud connected to a scheme to manipulate energy markets. 

The bulk of the fines — $303.5 million — aim to punish BP for conspiring to fix propane prices in 2003 and 2004. 

London-based BP also agreed to pay a $50 million fine and plead guilty to a felony for its role in a 2005 explosion at its Texas City refinery that killed 15 employees and injured more than 170 others. 

The Associated Press: BP To Pay $373 Million In Federal Probe

By Steven Mufson Washington Post Staff Writer
Monday, November 5, 2007; Page A01

After a week of new records for crude oil prices, the question is: How high can they go?

In the past 10 weeks, the price of crude oil has shot up $25 a barrel, closing at $95.93 in New York on Friday, near an all-time inflation-adjusted peak. Unlike earlier spikes in oil prices, which came on the heels of war in the Middle East, this latest ascent does not appear to be linked to any one conflict or to any physical shortage.

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Gus: these guys know something governments are ignoring and something the general public does not know... On one hand with the higher price of oil gives traders more money in their pockets, on the the other hand they know that peak oil is here, they know the Chinese want more of it, they know the Canadians have started to dig oil, sucking it out of rocks, using twice as much water than oil produced, but they have plenty of water from the ice, melting... etc... etc...

Big Oil's big dreams are close to coming true as Iraq's Oil Ministry prepares deals for the country's largest oil fields with terms that aren't necessarily what companies were hoping for but considered a foot in the door of the world's most promising oil sector.  

Iraq's proven oil reserves are only smaller than those in Saudi Arabia and Iran - and the country is only about 30 percent explored. Iraq produces about 2.4 million barrels per day, a recent increase from the 2 million bpd post-invasion average, but far below what its reserves could handle. Its oil sector is suffering from decades of Saddam Hussein-era mismanagement, U.N. sanctions and the effects of the current war. 

The decision of how to develop a resource that provides for nearly the entire federal budget is political and controversial.

To each side's alarm, the national government will rely on a Saddam-era law and Iraq's Kurdish region is signing deals on its own. 

Details of negotiations between the ministry and international oil majors are being kept quiet, though media are picking up on pieces of deal-making. 

Iraq Oil Grab Nears Completion: Big Oil Poised to Sign Lucrative Deals

On Tuesday, the Bush administration and Iraqi Prime Minister Nouri al-Maliki pushed a resolution through the U.N. Security Council extending the mandate that provides legal cover for foreign troops to operate in Iraq for another year.  

The move violated both the Iraqi constitution and a law passed earlier this year by the Iraqi parliament - the only body directly elected by all those purple-finger-waving Iraqis in 2005 - and it defied the will of around 80 percent of the Iraqi population. 

Earlier in the week, a group representing a majority of lawmakers in Iraq's parliament - a group made up of Sunni, Shiite and secular leaders - sent a letter to the Security Council, a rough translation of which reads: "We reject in the strongest possible terms the unconditional renewal of the mandate and ask for clear mechanisms to obligate all foreign troops to completely withdrawal from Iraq according to an announced timetable." 

We don't know if it was even read by members of the Security Council, but we do know that it, like previous communications from the Iraqi legislature, was completely ignored. 

Bush, Maliki Break Iraqi Law To Renew UN Mandate For Occupation

Even though there has been some diminution in violence, the fundamental political problem remains. The Sunnis, the Shi'ites and the Kurds are not fond of each other.

For a long time, the Shi'ites and the Kurds suffered under Saddam Hussein's primarily Sunni regime. Now that the Shi'ites and the Kurds are in control, they are not going to be easily reconciled. Furthermore, the Kurds don't especially like Arabs and want an independent country.

The Turks don't especially like the Kurds and will react violently to any move on the part of the Kurds to declare independence.  

So, the U.S. forces in the country have a wolf by the ear. We can keep the level of violence reasonably contained as long as we stay there, but neither the armed forces nor the U.S. budget can afford to stay there indefinitely.

And to leave, we have to let go of the wolf.  

The present peace in the Anbar province came about because the al-Qaeda fighters went too far and the Sunni sheiks decided to kill them. We, opportunistically, said, "Hey, as long as you're killing al-Qaeda instead of us, we will give you guns and money."

Now the Marines in Anbar are enjoying Arab hospitality, which I fear they are mistaking for friendship.  

No Peace On Earth