Plus:
*Iraq oil union chief calls ministry a human rights abuser for anti-union actions
*Barzani says up to Kirkuk decision without referendum
*Oil Smuggling bill passes Parliament
* BGR Energy Systems signs third SCOP deal
*Senate Committee says Bush admin. misled on Iraq threat
*Much, much more…

The US is holding hostage some $50bn of Iraq’s money to pressure the Iraqi government into signing an agreement seen by many Iraqis as prolonging the US occupation indefinitely, according to information leaked to Patrick Cockburn reports for The Independent. US negotiators are using the existence of $20bn in outstanding court judgments against Iraq in the US, to pressure their Iraqi counterparts into accepting the terms of the military deal.

All of Iraq’s funds in 2003, as well as funds seized from the previous regime, and all subsequent revenue – most of which is from oil – are held in an account at the Federal Reserve Bank of New York, per U.N. mandate and U.S. presidential decree. This not only lends transparency mechanisms, but prevents pre-2003 creditors and those awarded damages by court from taking hold of the money.

Iraq’s budget is paid via transfer of those funds to the Ministry of Finance’s account in the Central Bank of Iraq.

The president of the Iraqi Federation of Oil Unions, Hassan Juma’a Awad, has issued a statement calling the Oil Ministry’s actions in the South Oil Company a “human rights crime.”

He said the eight workers were union activists as well and transferred from the South Refinery Co. to the Daura refinery. (See Iraq Oil Report May 30 for more on the moves.)

“This act is a clear evidence that the Iraqi state is after liquidating Trade Unions in this important Iraqi economic sector, Oil. It is important to note that the south is the main source of Oil in Iraq,” Awad says in the statement. “The oil sector there comprises more than 39 thousand workers. The Iraqi state had no intention of having an Oil trade Union in that sector because it represents a threat to its authority.”

Iraq Oil Minister Hussain al-Shahristani says the short-list of companies qualified to bid for long-term oil field development deals was done on technical not political lines, TurkishPress.com reports.

Shahristani is also negotiating six two-year deals to boost production by 600,000 barrels per day. Simon Webb and Ahmed Rasheed have the latest for Reuters.

Iraq is to take tougher action against oil smugglers under a new law passed on Thursday aimed at plugging leaks in its oil industry that cost it billions of dollars every year in lost revenue, Ahmed Rasheed reports for Reuters. The Oil Derivatives Smuggling Law will give authorities the power to seize smugglers’ assets, including tankers and other vessels, impose fines and jail offenders for up to five years.

The head of parliament’s oil and gas committee, Ali Hussain Balu, estimates $3.8 billion are lost annually to crude smuggling if you factor that at $100 per barrel.

The oil and gas equipment division of BGR Energy Systems has bagged a contract for design, engineering, manufacture and supply of 70 oil products storage tanks for new Aumara Oil Products Depot, Iraq, The Economic Times of India reports. The contract is valued at $9,295,300 and will be completed in 12 months. It is BGR’s third contract with Iraq’s State Company for Oil Projects.

The scope of contract includes design, pre-fabrication and supply of steel storage tanks along with cooling water system, foam system, fire protection system, radar gauges and other instrumentation.

Kurdistan Regional Government Prime Minister Nechirvan Barzani is OK with power-sharing in Kirkuk, Reuters reports. The oil-rich city is a major part of a set of disputed territories that has been a wedge in relations between the federal government and the KRG. A U.N. proposal is due out soon.

“We are pushing for a solution, not especially a referendum. We have asked the UN to be technically involved because the situation is complicated,” Barzani said, Mohammed A Salih reports for Asia Times Online.

The United Arab Emirates said on Thursday it would name an ambassador to Baghdad within days, a step that eases Iraq’s diplomatic isolation in the Arab world, Reuters reports.

Iraq’s government has opened 22 state-run companies for domestic and international investment, hoping investors will see opportunities here now that violence is on the decline, a senior official said Thursday, Sinan Salaeddin reports for The Associated Press.

A long-delayed Senate committee report endorsed by Democrats and some Republicans concluded that President Bush and his aides built the public case for war against Iraq by exaggerating available intelligence and by ignoring disagreements among spy agencies about Iraq’s weapons programs and Saddam Hussein’s links to Al Qaeda, Mark Mazzetti and Scott Shane report for The New York Times.

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