Monday :: Nov 21, 2005

American And British Oil Companies Ready To Carve Up Iraqi Oil Fields - If They Can Be Secured


by Steve

Yup, but remember, it wasn't about the oil.

Iraqis face the dire prospect of losing up to $200bn (£116bn) of the wealth of their country if an American-inspired plan to hand over development of its oil reserves to US and British multinationals comes into force next year. A report produced by American and British pressure groups warns Iraq will be caught in an "old colonial trap" if it allows foreign companies to take a share of its vast energy reserves. The report is certain to reawaken fears that the real purpose of the 2003 war on Iraq was to ensure its oil came under Western control.
The Iraqi government has announced plans to seek foreign investment to exploit its oil reserves after the general election, which will be held next month. Iraq has 115 billion barrels of proved oil reserves, the third largest in the world.

Now it does make sense that Iraq would turn to outside companies to help rebuild their oil industry and share in the profits from doing so. But when we have lost over 2000 of our sons and daughters to supposedly liberate them into the arms of Al Qaeda, only to see Ahmed Chalabi position himself as Deputy Prime Minister, the details look all the more disgusting.

The Iraqi government has announced plans to seek foreign investment to exploit its oil reserves after the general election, which will be held next month. Iraq has 115 billion barrels of proved oil reserves, the third largest in the world.
According to the report, from groups including War on Want and the New Economics Foundation (NEF), the new Iraqi constitution opened the way for greater foreign investment. Negotiations with oil companies are already under way ahead of next month's election and before legislation is passed, it said.
The groups said they had amassed details of high-level pressure from the US and UK governments on Iraq to look to foreign companies to rebuild its oil industry. It said a Foreign Office code of practice issued in summer last year said at least $4bn would be needed to restore production to the levels before the 1990-91 Gulf War. "Given Iraq's needs it is not realistic to cut government spending in other areas and Iraq would need to engage with the international oil companies to provide appropriate levels of foreign direct investment to do this," it said.

And then your stomach turns....

Yesterday's report said the use of production sharing agreements (PSAs) was proposed by the US State Department before the invasion and adopted by the Coalition Provisional Authority. "The current government is fast-tracking the process. It is already negotiating contracts with oil companies in parallel with the constitutional process, elections and passage of a Petroleum Law," the report, Crude Designs, said.
Earlier this year a BBC Newsnight report claimed to have uncovered documents showing the Bush administration made plans to secure Iraqi oil even before the 9/11 terrorist attacks on the US. Based on its analysis of PSAs in seven countries, it said multinationals would seek rates of return on their investment from 42 to 162 per cent, far in excess of typical 12 per cent rates.

So that's how it works in Tony Blair's, George W. Bush's, and Dick Cheney's world? Our kids do the dying and therefore we get the oil?

Well, yes. And it was all planned out years ago, apparently.

And why haven’t we heard much, if anything about the Bush Administration planning to grab Iraqi oil reserves soon after taking office and months before 9/11? Well, have you taken a look lately at who advertises on all network and cable television?

I consider myself to be somewhat well informed, but when I went and did the Google search to find this BBC Newsnight segment run almost nine months ago, this was the first I heard about this story.

The Bush administration made plans for war and for Iraq's oil before the 9/11 attacks, sparking a policy battle between neo-cons and Big Oil, BBC's Newsnight has revealed.
In fact there were two conflicting plans, setting off a hidden policy war between neo-conservatives at the Pentagon, on one side, versus a combination of "Big Oil" executives and US State Department "pragmatists".
"Big Oil" appears to have won. The latest plan, obtained by Newsnight from the US State Department was, we learned, drafted with the help of American oil industry consultants.
Insiders told Newsnight that planning began "within weeks" of Bush's first taking office in 2001, long before the September 11th attack on the US.
The industry-favoured plan was pushed aside by a secret plan, drafted just before the invasion in 2003, which called for the sell-off of all of Iraq's oil fields. The new plan was crafted by neo-conservatives intent on using Iraq's oil to destroy the OPEC cartel through massive increases in production above OPEC quotas.
The sell-off was given the green light in a secret meeting in London headed by Fadhil Chalabi shortly after the US entered Baghdad, according to Robert Ebel.
Mr. Ebel, a former Energy and CIA oil analyst, now a fellow at the Center for Strategic and International Studies in Washington, told Newsnight he flew to the London meeting at the request of the State Department.
Philip Carroll, the former CEO of Shell Oil USA who took control of Iraq's oil production for the US Government a month after the invasion, stalled the sell-off scheme.
Mr. Carroll told us he made it clear to Paul Bremer, the US occupation chief who arrived in Iraq in May 2003, that: "There was to be no privatisation of Iraqi oil resources or facilities while I was involved."
Ariel Cohen, of the neo-conservative Heritage Foundation, told Newsnight that an opportunity had been missed to privatise Iraq's oil fields.
He advocated the plan as a means to help the US defeat OPEC, and said America should have gone ahead with what he called a "no-brainer" decision.
Mr. Carroll hit back, telling Newsnight, "I would agree with that statement. To privatize would be a no-brainer. It would only be thought about by someone with no brain."
New plans, obtained from the State Department by Newsnight and Harper's Magazine under the US Freedom of Information Act, called for creation of a state-owned oil company favoured by the US oil industry. It was completed in January 2004 under the guidance of Amy Jaffe of the James Baker Institute in Texas.

In other words, a new version of Aramco, this time in Iraq instead of Saudi Arabia, is about to be formed, using American and British oil companies as junior partners to share the profits. And yet this is the preferred option to what the neo-cons wanted, which was the creation of a large private company that held all the oil fields and would be used to break OPEC.

We can see the real impetus behind the Cheney Energy Task Force here from the earliest days of the administration. You’ll recall that it was discovered that the task force was reviewing maps of Iraq’s oil fields during early 2001. I can see where Cheney, who is not a neo-con, and his oil industry buddies would be planning from the outset of the administration to find a way to topple Saddam and install a state-run oil company in Iraq to bring on line a whole new source of oil in addition to what they already had in Aramco, thereby guaranteeing Big Oil more supply at the highest possible price while keeping the new entity and its fields inside of OPEC.

And then on the eve of the war, the Heritage Foundation and AEI neo-cons gain the upper hand and see the benefit of privatizing the oil by selling off the fields and using the fields to flood the market with new oil and destroy OPEC from the outside. But they subsequently lose the battle within the administration when Big Oil plays its card with Cheney and Bush, so now we see that the state-owned oil company was set up in early 2004, ready to go when security is sufficient to bring in the American and British oil companies as investors to push ahead with the infrastructure rebuilding, while keeping the eventual supplies within OPEC and its price-fixing.

Which explains why Cheney says we cannot leave Iraq because it will allow the terrorists a victory, when in fact the real reason is that if we leave Iraq, Big Oil will have lost out on their chance to have American kids secure for them the next Saudi Arabia at guaranteed OPEC-protected high prices.

Steve :: 8:57 PM :: Comments (11) :: TrackBack (0) :: Digg It!