Blood for Oil - Iraqi Oil
If the Iraqis Get Revenue
Sharing, Exxon Gets Their Oil
Courtesy of CounterPunch
By Richard W. Behan
George Bush has a land mine planted in the
supplemental appropriation legislation
working its way through Congress.
The Iraq Accountability Act passed by the
House and the companion bill passed in the
Senate contain deadlines for withdrawing our
troops from Iraq, in open defiance of the
President’s repeated objections.
He threatens a veto, but he might well be
bluffing. Buried deep in the legislation and
intentionally obscured is a near-guarantee
of success for the Bush Administration’s
true objective of the war-capturing Iraq’s
oil-and George Bush will not casually forego
that.
This bizarre circumstance is the end-game of
the brilliant, ever-deceitful maneuvering by
the Bush Administration in conducting the
entire scenario of the “global war on
terror.”
The supplemental appropriation package
requires the Iraqi government to meet a
series of “benchmarks” President Bush
established in his speech to the nation on
January 10 (in which he made his case for
the “surge”). Most of Mr. Bush’s benchmarks
are designed to blame the victim, forcing
the Iraqis to solve the problems George Bush
himself created.
One of the President’s benchmarks, however,
stands apart. This is how the President
described it: “To give every Iraqi citizen a
stake in the country’s economy, Iraq will
pass legislation to share oil revenues among
all Iraqis.” A seemingly decent, even noble
concession. That’s all Mr. Bush said about
that benchmark, but his brevity was gravely
misleading, and it had to be intentional.
The Iraqi Parliament has before it today, in
fact, a bill called the hydrocarbon law, and
it does call for revenue sharing among
Sunnis, Shiites, and Kurds. For President
Bush, this is a must-have law, and it is the
only “benchmark” that truly matters to his
Administration.
Yes, revenue sharing is there-essentially in
fine print, essentially trivial. The bill is
long and complex, it has been years in the
making, and its primary purpose is
transformational in scope: a radical and
wholesale reconstruction-virtual
privatization-of the currently nationalized
Iraqi oil industry.
If passed, the law will make available to
Exxon/Mobil, Chevron/Texaco, BP/Amoco, and
Royal Dutch/Shell about 4/5’s of the
stupendous petroleum reserves in Iraq. That
is the wretched goal of the Bush
Administration, and in his speech setting
the revenue-sharing “benchmark” Mr. Bush
consciously avoided any hint of it.
The legislation pending now in Washington
requires the President to certify to
Congress by next October that the benchmarks
have been met-specifically that the Iraqi
hydrocarbon law has been passed. That’s the
land mine: he will certify the American and
British oil companies have access to Iraqi
oil. This is not likely what Congress
intended, but it is precisely what Mr. Bush
has sought for the better part of six years.
It is why we went to war.
For years President Bush has cloaked his
intentions behind the fabricated “Global War
on Terrorism.” It has long been suspected
that oil drove the wars, but dozens of
skilled and determined writers have
documented it. It is no longer a matter of
suspicion, nor is it speculation now: it is
sordid fact. (See a brief summary of the
story at
http://www.alternet.org/waroniraq/47489
. )
Planning for the two wars was underway
almost immediately upon the Bush
Administration taking office–at least six
months before September 11, 2001. The wars
had nothing to do with terrorism. Terrorism
was initially rejected by the new
Administration as unworthy of national
concern and public policy, but 9/11 gave
them a conveniently timed and spectacular
alibi to undertake the wars. Quickly
inventing a catchy “global war on terror”
theme, the Administration disguised the true
nature of the wars very cleverly, and with
enduring success.
The “global war on terror” is bogus. The
prime terrorist in Afghanistan and the
architect of 9/11, Osama bin Laden, was
never apprehended, and the President’s
subsequent indifference is a matter of
record. And Iraq harbored no terrorists at
all. But both countries were invaded, both
countries suffer military occupation today,
both are dotted with permanent U.S. military
bases protecting the hydrocarbon assets, and
both have been provided with puppet
governments.
And a billion dollar embassy in Baghdad is
under construction now. It will be the
largest U.S. embassy in the world by a
factor of ten. It consists of 21 buildings
on 104 acres, six times larger than the
United Nations compound in New York city,
larger than Vatican City. It will house a
delegation of more than five thousand
people. It will have its own water,
electric, and sewage systems, and it is
surrounded by a fortress wall of concrete
fifteen feet thick. For an Administration
committed to fighting terrorism with armies
and bombs, that’s far more anti-terror
diplomacy than a tiny country needs. There
must be another purpose for it.
In the first two months of the Bush
Administration two significant events took
place that preordained the Iraqi war. Vice
President Cheney’s Energy Task Force was
created, composed of federal officials and
oil industry people. By March of 2001, half
a year before 9/11, the Task Force was
poring secretly over maps of the Iraqi oil
fields, pipe lines, and tanker terminals. It
studied a listing of foreign oil company
“suitors” for exploration and development
contracts, to be executed with Saddam
Hussein’s oil ministry. There was not a
single American or British oil company
included, and to Mr. Cheney and his cohorts
that was intolerable. The final report of
the Task Force was candid: “… Middle East
oil producers will remain central to world
security. The Gulf will be a primary focus
of U.S. international energy policy.” The
detailed meaning of “focus” was left blank.
The other event was the first meeting of
President Bush’s National Security Council,
and it filled in the blank. The Council
abandoned abruptly the decades-long attempt
to resolve the Israeli-Palestinian conflict,
and set a new priority for Middle East
foreign policy instead: the invasion of
Iraq. This, too, was six months before 9/11.
“Focus” would mean war.
By the fall of 2002, the White House Iraq
Group-a collection not of foreign policy
experts but of media and public relations
people-was cranking up the marketing
campaign for the war. A contract was signed
with the Halliburton Corporation-even before
military force in Iraq had been authorized
by Congress-to organize the suppression of
oil well fires, should Saddam torch the
fields as he had done in the first Gulf War.
Little was left to chance.
The oil industry is the primary client and
top-ranked beneficiary of the Bush
Administration. There can be no question the
Administration intended to secure for
American oil corporations the rich petroleum
resources of Iraq: 115 billion barrels of
proven reserves, twice that in probable and
possible resources, potentially far more
than Saudi Arabia. The Energy Task Force
spoke to this and the National Security
Council answered.
A secret NSC memorandum in 2001 spoke
candidly of “actions regarding the capture
of new and existing oil and gas fields” in
Iraq. In 2002 Paul Wolfowitz suggested
simply seizing the oil fields. These words
and suggestions were draconian, overt, and
reprehensible-morally, historically,
politically and diplomatically. The seizure
of the oil would have to be oblique and far
more sophisticated.
A year before the war the State Department
undertook the “Future of Iraq” project,
expressly to design the institutional
contours of the postwar country. The “Oil
and Energy Working Group” looked with dismay
at the National Iraqi Oil Company, the
government agency that owned and operated
the Iraqi oil fields and marketed the
products. 100% of the revenues went directly
to the central government, and constituted
about 90% of its income. Saddam Hussein
benefited, certainly-his lavish palaces-but
the Iraqi people did so to a far greater
extent, in terms of the nation’s public
services and physical infrastructure. For
this reason nationalized oil industries are
the norm throughout the world.
The Oil and Energy Working Group designed a
scheme that was oblique and sophisticated,
indeed. The oil seizure would be less than
total. It would be obscured in complexity.
The apparent responsibility for it would be
shifted, and it would be disguised as
benefiting, even necessary to Iraq’s well
being. Their work was supremely ingenious,
undeniably brilliant.
The plan would keep the National Iraqi Oil
Company in place, to continue overseeing the
currently producing fields. But those fields
represent only 19% of Iraq’s petroleum
reserves. The other 81% would be flung open
to “investment” by foreign oil interests,
and the companies in favored positions
today-because of the war and their political
connections-are Exxon/Mobil, Chevron/Texaco,
BP/Amoco, and Royal Dutch/Shell.
The nationalized industry would be 80%
privatized.
The investment vehicle would be the
“production sharing agreement,” a long-term
contract-up to 40 years-that grants to the
company a share of the oil produced; in
exchange, the company underwrites the
development costs and oilfield
infrastructure. Such “investment” is touted
by the Bush Administration and its puppets
in Iraq as necessary to the country’s
recovery, and a huge benefit, accordingly.
But it is not unusual for these contracts to
grant the companies more than half the
profits for the first 15-30 years, and to
deny the host country any revenue at all
until the investment costs have been
recovered.
The Iraqi oil industry does very much need a
great deal of investment capital, to repair,
replace, and upgrade its infrastructure. But
it does not need Exxon/Mobil or any other
foreign company to provide it. At a reduced
level, Iraq is still producing oil and hence
revenue, and no country in the world,
perhaps, has better collateral against which
to float bond issues for public investment.
Privatization of any sort and in any degree
is utterly unnecessary in Iraq today.
The features of the State Department plan
were inserted by Paul Bremer’s Provisional
Coalition Authority into the developing
structures of Iraqi governance. American oil
companies were omnipresent in Baghdad then
and have been since, shaping and shepherding
the plan through the several iterations of
puppet governments-the “democracy” said to
be taking hold in Iraq.
The package today is in the form of draft
legislation, the hydrocarbon law. Only a
handful of Iraqi officials know its details.
Virtually none of them had a hand in its
construction. (It was first written in
English.) And its exclusive beneficiaries
are the American and British oil companies,
whose profits will come directly from the
pockets of the Iraqi people.
The Iraqi people do, however, benefit to
some degree. The seizure is not total. The
hydrocarbon law specifies the oil
revenues-the residue accruing to Iraq-will
be shared equally among the Sunni, Shiite,
and Kurdish regions, on a basis of
population. This is the feature President
Bush relies upon exclusively to justify, to
insist on the passage of the hydrocarbon
law. His real reasons are Exxon/Mobil,
Chevron/Texaco, BP/Amoco, and Royal
Dutch/Shell.
No one can say at the moment how much the
hydrocarbon law will cost the Iraqi people,
but it will be in the hundreds of billions.
The circumstances of its passage are mired
in the country’s chaos, and its final
details are not yet settled. If and when it
passes, however, Iraq will orchestrate the
foreign capture of its own oil. The
ingenious, brilliant seizure of Iraqi oil
will be assured.
That outcome has been on the Bush
Administration’s agenda since early in 2001,
long before terrorism struck in New York and
Washington. The Iraqi war has never been
about terrorism.
It is blood for oil.
The blood has been spilled already, hugely,
criminally. More than 3,200 American
military men and women have died in Iraq.
26,500 more have been wounded. But the oil
remains in play.
The game will end if the revenue-sharing
“benchmark” is fully enforced. The land mine
will detonate.