oil related 051007

Realpolitik Dictates Control of Oil Assets

Syed Rashid Husain

Iraq war was about oil, Alan Greenspan admitted in his memoirs “The Age of Turbulence.”

In the run-up to the “Shock and Awe” in March 2003 and in the following months, from Bush to Condi and Powell to Bremer, every one took pains to underline it was not.

President Bush said: The idea that the United States covets Iraqi oil fields is a “wrong impression.” Condoleeza Rice, in response to the proposition, “if Saddam’s primary export or natural resource was olive oil rather than oil, we would not be going through this situation,” said: “This cannot be further from the truth.” And she emphasized: “This is not about oil.”

Colin Powell: “This is not about oil, this is about a tyrant, a dictator.” Donald Rumsfeld: “It’s not about oil and it’s not about religion.”

Coalition Provisional Authority chief Paul Bremer: “I have heard that allegation and I simply reject it.” General John Abizaid, the former commander, Central Command, said “it’s not about oil.” “It’s not about the oil,” the Financial Times reported Richard Perle shouting at a parking attendant in frustration. Australian Treasurer Peter Costello: “This is not about oil.”

And thus when Washington insider Alan Greenspan said “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.”

The primary evidence indicating that the Bush administration coveted Iraqi oil from the start also comes from two diverse but impeccably reliable sources: Paul O’Neill, the Treasury Secretary (2001-2003) under President George W. Bush and Falah Al-Jibury, a well-connected Iraqi-American oil consultant, analyst Dilip Hero argued in a recent piece.

According to O’Neill’s memoirs, the top item on the agenda of the National Security Council’s first meeting after Bush entered the Oval Office was Iraq. That was Jan. 30, 2001, more than seven months before the 9/11 attacks. The next National Security Council (NSC) meeting on Feb.1 was also devoted exclusively to Iraq.

Among the relevant documents later sent to NSC members, including O’Neill, was one prepared by the Defense Intelligence Agency (DIA). It had already mapped Iraq’s oil fields and exploration areas, and listed American corporations likely to be interested in participating in Iraq’s petroleum industry.

Another DIA document in the package, entitled “Foreign Suitors for Iraqi Oilfield Contracts,” listed companies from 30 countries — France, Germany, Russia, and Britain, among others — their specialties and bidding histories. The attached maps pinpointed “super-giant oil field,” “other oil field,” and “earmarked for production sharing,” and divided the basically undeveloped but oil-rich southwest of Iraq into nine blocks, indicating promising areas for future exploration.

According to Al-Jibury, the Bush administration began making plans for Iraq’s oil industry “within weeks” of Bush taking office in January 2001. In an interview with the BBC’s Newsnight program, aired on March 17, 2005, he referred to his participation in such secret meetings.

By January 2003, a plan for Iraqi oil crafted by the State Department and oil majors emerged under the guidance of Amy Myers Jaffe of the James A. Baker III Institute for Public Policy at Rice University. It recommended maintaining the state-owned Iraq National Oil Company, whose origins dated back to 1961 — but open it up to foreign investment after an initial period in which US approved Iraqi managers would supervise the rehabilitation of the war-damaged oil infrastructure. The existence of this group would come to light in a report by the Wall Street Journal on March 3, 2003.

Unknown to the architects of this scheme, according to the same BBC Newsnight report, the Pentagon’s planners, apparently influenced by powerful neocons in and out of the administration, had devised their own super-secret plan.

It involved the sale of all Iraqi oil fields to private companies with a view to increasing output well above the quota set by the Organization of the Petroleum Exporting Countries (OPEC) for Iraq in order to weaken, and then destroy, OPEC.

On Oct. 11, 2002 the New York Times reported that the Pentagon already had plans to occupy and control Iraq’s oilfields. On Oct. 30, Oil and Gas International revealed that the Bush administration wanted a working group of 12 to 20 people to (a) recommend ways to rehabilitate the Iraqi oil industry “in order to increase oil exports to partially pay for a possible US military occupation government,” (b) consider Iraq’s continued membership of OPEC, and (c) consider whether to honor contracts Saddam Hussein had granted to non-American oil companies.

By late October 2002, columnist Maureen Dowd of the New York Times would later reveal that Halliburton, the energy services company previously headed by vice president Dick Cheney, had prepared a confidential 500-page document on how to handle Iraq’s oil industry after an invasion and occupation of Iraq. This was, commented Dowd, “a plan (Halliburton) wrote several months before the invasion of Iraq, and before it got a no-bid contract to implement the plan (and overbill the US).

Those who had doubts lost them in the chaotic first post-invasion days when US troops guarded the Ministry of Oil and the Ministry of Interior and stood by as looters picked bare and torched official buildings all over the city and ransacked Iraq’s national museum.

It is in this perspective that the current Iraq oil draft fiasco has to be seen. Mid-September, it was reported that the carefully constructed compromise on a draft law governing Iraq’s rich oil fields, agreed to in February after months of arduous talks among Iraqi political groups, appears to have collapsed.

The oil law — which would govern how oil fields are developed and managed — is one of several benchmarks that the Bush administration has been pressing the Iraqis to meet as a sign that they are making headway toward creating an effective government. That doesn’t seem to be moving — at least for now.

Realpolitik dictates oil assets to be under control. Henry Kissinger in an op-ed column in Washington Post last week underlined that control over oil is the key issue that should determine whether the US undertakes military action against Iran. Another Iraq in the making — a trillion dollar question indeed!

Source : Arab News