It's in US interests to keep a tight grip politics of black gold

US combat troops will pull out of Iraq's cities and main towns on Tuesday as the war-torn country takes sole charge of security in a major steppingstone to a complete American withdrawal.

The withdrawal comes in time with the set date of June 30, as agreed in the US-Iraq Status of Forces Agreement (Sofa).

However, Iraq failed to accomplish the true goal of the agreement, which was to secure its freedom from the UN Chapter 7 binding clauses.

According to the Sofa, the US will maintain its troops in Iraq ranging from 35,000 to 50,000, to the end of 2011.

These forces will be in US bases scattered across the country, fully equipped and ready to intervene in situations they deem necessary.

The US troop pull-out from the cities on June 30 poses a very important question: Why did the US invade Iraq in the first place?

The answer to this question came readily during the first few hours of the invasion, when US tanks stood guard at the gates of the Ministry of Oil, leaving the rest of Iraq's ministries and infrastructure facilities to be burnt and looted.

For those who were not convinced of this reason back in 2003, the same answer will be repeated, coinciding with the withdrawal of US troops.

The Minister of Oil stated on June 10 that the ministry will announce at the end of the month the names of oil companies to be awarded contracts to work in the country.

"On June 29 and 30, we will invite the press to witness the opening of the envelopes that will name the oil firms which will be awarded contracts in the first round of bidding," Oil Minister Hussain Al Shahristani said in a news conference.

He said that only 35 companies and consortia out of 120 applicants met the criteria set by the oil ministry for those who want to bid for contracts in six major oil fields and two gas fields.

The British Sunday Times newspaper recently published a story about the biggest rush towards the easiest oil. The title points at the astronomical profits to be reaped from these contracts.

The foreign oil companies are competing for six huge oil fields and two gas fields for 20 years.

Iraq has oil reserves of 115 billion barrels. Among the competing companies are British Petroleum, Shell, China's Sinopec, France's Total and Russia's Lukoil.

Despite the fact that security is not yet established in Iraq in a way that encourages foreign oil companies to invest in Iraq, the appetite of these companies will not be curbed.

Another factor to the advantage of these foreign companies is that the oil fields are located in southern Iraq, which is more secure than the central and northern parts of the country. Foreign security contractors are also available in abundance in the south.

Reports also mentioned that US experts had drafted oil contracts in Iraq, but Tom Casey, the US State Department spokesman, was quick to deny the reports. However, Casey mentioned that US advisers do in fact offer technical advice to the Iraqi Ministry of Oil.

This takes place in an atmosphere of chaos. Over the past three years, the Ministry of Oil has not been able to succeed in boosting the production of oil in the country, especially as a major decline took place in agricultural production due to water shortages and the deteriorating security situation.

Al Shahristani was subjected to questioning by the Iraqi parliament about his poor performance.

Apart from all that, there is the issue of major differences between the Ministry of Oil and the Kurdish regional government over technical and legal issues related to the Kurds' right to utilise the newly discovered oil fields in their region.

The announcement of the companies that won oil contracts will be done amid an atmosphere of anger and refusal.

The committee of oil and gas in the parliament and other senior Iraqi oil industry executives are rejecting the contracts because they believe these contracts will gravely harm national economy.

The absence of laws protecting the oil industry will also lead to major constitutional violations in the area of oil contracting.

And although the new oil and gas draft law of 2006 was approved by Prime Minister Nouri Al Maliki, it has not come into effect because it failed to pass in the parliament.

Major differences exist over the draft law, and it will not be resolved any time soon as it entails issues related to the Kurdish regional government and the law's dwarfing of the Iraq Petroleum Company's role in the industry.

However, the government has proceeded to prepare the oil contracts according to the 1961 Iraqi Oil Law No. 80, which was drafted and approved after the July 14, 1958 revolution.

After that, Iraq's oil was nationalised in 1972, and Iraq was the only country in the Middle East to have complete control over its oil resources.

The road may not be completely paved before signing these foreign oil contracts, as the Iraqi constitution that was approved in 2005 stipulates that contracts have to be signed according to the new oil and gas law that has not won full approval.

It is not to the benefit of the Iraqi government to clash with the lawmakers in parliament over this issue, especially as the government has very little time before the next elections.

- Dr Mohammad Akef Jamal is an Iraqi writer based in Dubai.