Robbing Iraq’s oil wealth


Away from the glare of media publicity, a massive robbery is underway in what is referred to as Iraqi oil contracts. An oil consortium led by British Petroleum (BP) grabbed the first contract on June 30 to develop the Rumaila oil field as dozens of other, mostly Western multinationals jostled for rights to the country’s vast oil and gas reserves. Among the 32 firms are such American and European giants as ExxonMobil and Shell and a sprinkling of companies from China, India, and other Asian states chasing billions of barrels of oil and trillions of cubic meters of gas. On offer are six oil and two gas fields.

The US government and its pliant media as well as the rest of the Western corporate media have focused on US troop redeployment –” little more than getting American soldiers out of harm’s way –” from Iraqi cities to create the impression that it was drawing down its troop commitment in Iraq. The brunt of the attacks will now be borne by Iraqi troops while American soldiers have relocated to heavily fortified bases. These are to be augmented by the billion-dollar US embassy in Baghdad, referred to as a “city within a city”, to continue Iraq’s permanent occupation. While this fraud was being perpetrated, the Western oil companies complained about lack of security. Rumaila is located in Diyala province, scene of some of the most intense resistance to foreign occupation. Iraqi Prime Minister Nuri al-Maliki tried to assuage foreign concerns over poor security damaging business prospects and that contracts could be voided by future governments through a promise of “security protection” and offering “all guarantees for their investments” and other “facilities needed to ensure the success of this process”.

Despite concerns about security, the reality is foreign multinationals will set the price and control production quotas. Before the invasion of Iraq in March 2003, American policy makers led by the neocons had stated they would like to flood the market with Iraqi oil to not only pay for US invasion and occupation but also try and wreck the Organization of Petroleum Exporting Countries (OPEC). While Iraqi oil production has suffered immensely as a result of occupation as well as sabotage by the Iraqi resistance that rightly views occupation as an attempt to grab Iraq’s oil, the manner in which oil contracts are being awarded will benefit not Iraq but Western multinationals.

Iraq’s proven oil reserves are second only to Saudi Arabia. And new exploration will probably raise Iraq’s reserves to more than 200 billion barrels of high-grade crude at very low extraction price. The four American and British multinationals have been keen to get back into Iraq, from which they were excluded with the nationalization of oil in 1972. It was Prime Minister Mohammad Mossadegh of Iran that had set the trend by nationalizing the Anglo-Iranian Oil Company. He paid the price, being overthrown in a CIA-British engineered coup in 1953. During the short-lived oil embargo of 1973, following massive US support for Israel’s war against Egypt and Syria, then US President Richard Nixon had considered the idea of seizing oil fields in Saudi Arabia, Kuwait, and the United Arab Emirates.

The 2003 invasion of Iraq was primarily about opening up its oil industry to Western multinationals. According to Paul O’Neill, Treasury Secretary in George Bush’s first term, the top item on the agenda of the National Security Council’s first meeting on January 30, 2001 with the new president was Iraq. That was more than seven months before the 9/11 attacks. The next National Security Council (NSC) meeting on February 1 was devoted exclusively to Iraq. In his memoirs, The Age of Turbulence, former Federal Reserve chairman Alan Greenspan, has candidly admitted, “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” In fact, as early as 1989, James Schlesinger, a former US energy secretary, had written that in the 21st century the country that controlled the oil spigot would dominate the world (The National Interest, Autumn 1989 edition). After the first US attack on Iraq in January 1991, punishing sanctions were imposed on Baghdad. While Saddam Husain signed major contracts with companies from France, Russia, China, and elsewhere, they could not operate because of US-UK-backed UN sanctions.

With the occupation of Iraq, happy days are here again for the Anglo-American mafia. With Washington running the show in Baghdad, American and British multinationals are poised to grab most of the lucrative oil deals worth hundreds of billions of dollars in profits. The Iraqi constitution of 2005, drafted under the guidance of US advisors (Mark Feldman et al), contains language that guarantees a major role for foreign companies. Similarly, deals on Production Sharing Agreements are to be finalized soon that will give companies control over dozens of fields, including the super-giant Majnoon oil field.

The invasion of Iraq may have cost the US hundreds of billions of dollars — two trillion dollars according to Harvard economist Joseph Stiglitz — but the “price” for Americans may be worth it because US oil giants will now rake in trillions in profit for decades to come. It should be noted that regardless of what US President Barack Obama says about not wishing to keep a single American soldier in Iraq beyond 2011, few believe him. After killing more than a million Iraqis and losing 4,300 American soldiers (as of this date), the US is not going to let go of the golden goose for whose capture it spent decades planning. This is also evident from the Declaration of Principles agreement of November 2007 between Bush and the Maliki government. This permits US forces to remain indefinitely in Iraq to “deter foreign aggression” and to provide “security.” It also commits Iraq to facilitate and encourage “the flow of foreign investments to Iraq, especially American investments,” a euphemism for privileged access to “some of the world’s largest oil reserves.”