Answer: The oil companies screw the country that owns the oil and they
restrict production in order to boost prices and increase their
profits. If Bush gets his way, oil prices will stay high or go higher
for decades to come.
Here's a quote indicating Iraqi's previous experience with privatized
oil:
"In some ways, the debate on "privatisation" has obscured the
important practical issues of who gets the revenue from the oil, and
who controls the way in which oil is developed. On this matter, Iraq
has a relevant history.
The development of Iraq's oil industry began in the aftermath of the
First World War, while the country was occupied by Britain under a
League of Nations Mandate. In 1925, Iraq's British-installed monarch,
King Faisal, signed a concession contract with the Iraq Petroleum
Company (IPC)(21), a consortium of British, French and (later) American
oil companies. The contract followed a model widely applied in the
British colonies. It was for a period of 75 years, during which terms
were frozen. Combined with two further concessions granted in the
1930s, the IPC obtained rights to all of the oil in the entire country.
Even the Iraqi call for a 20% stake in the concession was denied,
despite having been specified in earlier agreements.
As Iraqi frustration at the unfair terms of the deal grew, in the 1950s
and 1960s the contract came under pressure. Underpinning this were the
issues of whether the split of revenues between company and state was a
fair one, and the degree of control the foreign companies had over the
development: they restricted production to boost their producing areas
elsewhere in the world, and used their monopoly on information to fix
prices, depriving Iraq of income. These same arguments were echoed in
all of the major oil-producing countries at the time, most of which had
similar deals with multinational companies. The ultimate conclusion to
these disputes was the nationalisation of many oil industries - in
Iraq's case in two stages in 1961 and 1972. . ."
http://www.globalpolicy.org/security/oil/2005/crudedesigns.htm
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