EMAIL PAGE NINE
COLUMN EIGHTY, DECEMBER 1, 2002
(Copyright © 2002 The Blacklisted Journalist)
BUSH'S IRAQ WAR IS ALL ABOUT OIL
FW: In Iraqi War Scenario, Oil Is Key Issue
Date: Mon, 7 Oct 2002 22:22:03 -0700
From: "venire" firstname.lastname@example.org
Iraqi War Scenario, Oil Is Key Issue
By Dan Morgan and David B. Ottaway
U.S.-led ouster of Iraqi President Saddam Hussein could open a bonanza for
American oil companies long banished from Iraq, scuttling oil deals between
Baghdad and Russia, France and other countries, and reshuffling world petroleum
markets, according to industry officials and leaders of the Iraqi opposition.
senior Bush administration officials say they have not begun to focus on the
issues involving oil and Iraq, American and foreign oil companies have already
begun maneuvering for a stake in the country's huge proven reserves of 112
billion barrels of crude oil, the largest in the world outside Saudi Arabia.
importance of Iraq's oil has made it potentially one of the administration's
biggest bargaining chips in negotiations to win backing from the U.N. Security
Council and Western allies for President Bush's call for tough international
action against Hussein. All five permanent members of the Security Council---
the United States, Britain, France, Russia and China---have international oil
companies with major stakes in a change of leadership in Baghdad.
pretty straightforward," said former CIA director R. James Woolsey, who has
been one of the leading advocates of forcing Hussein from power. "France
and Russia have oil companies and interests in Iraq. They should be told that if
they are of assistance in moving Iraq toward decent government, we'll do the
best we can to ensure that the new government and American companies work
closely with them."
he added: "If they throw in their lot with Saddam, it will be difficult to
the point of impossible to persuade the new Iraqi government to work with
the mere prospect of a new Iraqi government has fanned concerns by non-American
oil companies that they will be excluded by the United States, which almost
certainly would be the dominant foreign power in Iraq in the aftermath of
Hussein's fall. Representatives of many foreign oil concerns have been meeting
with leaders of the Iraqi opposition to make their case for a future stake and
to sound them out about their intentions.
the Persian Gulf War in 1991, companies from more than a dozen nations,
including France, Russia, China, India, Italy, Vietnam and Algeria, have either
reached or sought to reach agreements in principle to develop Iraqi oil fields,
refurbish existing facilities or explore undeveloped tracts. Most of the deals
are on hold until the lifting of U.N. sanctions.
Iraqi opposition officials made clear in interviews last week that they will not
be bound by any of the deals.
will review all these agreements, definitely," said Faisal Qaragholi, a
petroleum engineer who directs the London office of the Iraqi National Congress
(INC), an umbrella organization of opposition groups that is backed by the
United States. "Our oil policies should be decided by a government in Iraq
elected by the people."
Chalabi, the INC leader, went even further, saying he favored the creation of a
U.S.-led consortium to develop Iraq's oil fields, which have deteriorated under
more than a decade of sanctions. "American companies will have a big shot
at Iraqi oil," Chalabi said.
INC, however, said it has not taken a formal position on the structure of Iraq's
oil industry in event of a change of leadership.
the Bush administration's campaign against Hussein is presenting vast
possibilities for multinational oil giants, it poses major risks and
uncertainties for the global oil market, according to industry analysts.
to Iraqi oil and profits will depend on the nature and intentions of a new
government. Whether Iraq remains a member of the Organization of Petroleum
Exporting Countries, for example, or seeks an independent role, free of the OPEC
cartel's quotas, will have an impact on oil prices and the flow of investments
to competitors such as Russia, Venezuela and Angola.
Russian oil companies such as Lukoil have a major financial interest in
developing Iraqi fields, the low prices that could result from a flood of Iraqi
oil into world markets could set back Russian government efforts to attract
foreign investment in its untapped domestic fields. That is because low world
oil prices could make costly ventures to unlock Siberia's oil treasures far less
and Vice President Cheney have worked in the oil business and have long-standing
ties to the industry. But despite the buzz about the future of Iraqi oil among
oil companies, the administration, preoccupied with military planning and making
the case about Hussein's potential threat, has yet to take up the issue in a
substantive way, according to U.S. officials.
Future of Iraq Group, a task force set up at the State Department, does not have
oil on its list of issues, a department spokesman said last week. An official
with the National Security Council declined to say whether oil had been
discussed during consultations on Iraq that Bush has had over the past several
weeks with Russian President Vladimir Putin and Western leaders.
Friday, a State Department delegation concluded a three-day visit to Moscow in
connection with Iraq. In early October, U.S. and Russian officials are to hold
an energy summit in Houston, at which more than 100 Russian and American energy
companies are expected.
Curt Weldon (R-Pa.) said Bush is keenly aware of Russia's economic interests in
Iraq, stemming from a $7 billion to $8 billion debt that Iraq ran up with Moscow
before the Gulf War. Weldon, who has cultivated close ties to Putin and Russian
parliamentarians, said he believed the Russian leader will support U.S. action
in Iraq if he can get private assurances from Bush that Russia "will be
made whole" financially.
of the Iraqi National Congress said last week that the INC's Washington
director, Entifadh K. Qanbar, met with Russian Embassy officials here last month
and urged Moscow to begin a dialogue with opponents of Hussein's government.
even with such groundwork, the chances of a tidy transition in the oil sector
appear highly problematic. Rival ethnic groups in Iraq's north are already
squabbling over the the giant Kirkuk oil field, which Arabs, Kurds and minority
Turkmen tribesmen are eyeing in the event of Hussein's fall.
the volumes have dwindled in recent months, the United States was importing
nearly 1 million barrels of Iraqi oil a day at the start of the year. Even so,
American oil companies have been banished from direct involvement in Iraq since
the late 1980s, when relations soured between Washington and Baghdad.
in the 1990s turned to non-American companies to repair fields damaged in the
Gulf War and Iraq's earlier war against Iran, and to tap undeveloped reserves,
but U.S. government studies say the results have been disappointing.
Russia's Lukoil negotiated a $4 billion deal in 1997 to develop the
15-billion-barrel West Qurna field in southern Iraq, Lukoil had not commenced
work because of U.N. sanctions. Iraq has threatened to void the agreement unless
work began immediately.
October, the Russian oil services company Slavneft reportedly signed a $52
million service contract to drill at the Tuba field, also in southern Iraq. A
proposed $40 billion Iraqi-Russian economic agreement also reportedly includes
opportunities for Russian companies to explore for oil in Iraq's western desert.
French company Total Fina Elf has negotiated for rights to develop the huge
Majnoon field, near the Iranian border, which may contain up to 30 billion
barrels of oil. But in July 2001, Iraq announced it would no longer give French
firms priority in the award of such contracts because of its decision to abide
by the sanctions.
of several major firms said they were taking care to avoiding playing any role
in the debate in Washington over how to proceed on Iraq. "There's no real
upside for American oil companies to take a very aggressive stance at this
stage. There'll be plenty of time in the future," said James Lucier, an oil
analyst with Prudential Securities.
with the end of sanctions that likely would come with Hussein's ouster,
companies such as ExxonMobil and ChevronTexaco would almost assuredly play a
role, industry officials said. "There's not an oil company out there that
wouldn't be interested in Iraq," one analyst said.
writer Ken Bredemeier contributed to this report. ##
CLICK HERE TO GET TO INDEX OF COLUMN EIGHTY
CLICK HERE TO GET TO INDEX OF COLUMNS
Blacklisted Journalist can be contacted at P.O.Box 964, Elizabeth, NJ 07208-0964
The Blacklisted Journalist's E-Mail Address:
THE BLACKLISTED JOURNALIST IS A SERVICE MARK OF AL ARONOWITZ