Thursday, June 26, 2008


Sunday June 22, 2008

Oil is thicker than blood : BEHIND THE HEADLINES


Months before a new president takes office, the US affirms the main purpose of invading Iraq.

EVENTS in Iraq have been gathering pace in recent days, and it’s far from the mounting death toll on all sides long pushed into the background.

The latest news topic instead is how Western oil giants are salivating at the prospect of carving up Iraq’s oil wealth in no-bid contracts later this month. The theme of triumphant giantism ranged from the size of the oil companies to the size of Iraq’s oil reserves.

First, some history: soon after a rising Saddam Hussein nationalised Iraq’s oil assets in 1972, US players had been itching to get back in. In 1980, “peace president” Jimmy Carter said Persian Gulf oil was so vital to US interests that it justified military action to get it, laying the groundwork for US Central Command (Centcom) to do that.

When Saddam took power in July 1979, five months after Ayatollah Khomeini took over in Iran, Saddam seemed useful to US interests in checking leftists within and Islamist Iran next door. But he later entertained visions of being another Gamal Nasser in a pan-Arabism that would restrict oil flow westwards.

How would US strategists overcome that? Towards the end of Bill Clinton’s second term, neo-conservatives in the US oil industry were aching to seize the “ultimate prize” of Iraqi oil.

Vice-President Dick Cheney headed the shadowy Energy Task Force soon upon taking office in 2001, and then Sept 11 happened. The following year the State Department set up a “working group on oil and energy” in a project that included Iraqi political exiles.

In March 2003 Iraq was invaded and occupied, Saddam was overthrown, and the Iraqi exiles became part of the new US-friendly government. Since then, US “advisers” worked on the new Constitution and the controversial petrochemical law, both now accepted by the Iraqi Cabinet.

This proposed law would effectively hand over control of dozens of rich oilfields to the “Big Four” ExxonMobil, BP, Shell and Chevron, with Australia’s BHP and France’s Total squeezing in with the last two. The contracts to be signed this month are unusual in avoiding tenders, edging out some 40 oil companies from countries like China, India and Russia that Saddam had preferred.

The earlier contracts with these countries had already been stalled by US-engineered UN sanctions. After the invasion of Iraq, US officials threatened to stop financial and military aid until the new Iraqi Cabinet accepted the new oil law.

The Cabinet complied, only to see the Bill held up by Parliament, so this month’s “surge” by the oil companies seeks to push it through. Most Iraqis and many parliamentarians reject the Bill, particularly since US officials had studied and “approved” it before they could even look at it.

This month’s contracts are for an initial two years, and will favour the Big Four in much larger deals to come. They conform with US moves to seize Caspian oil since 2002, pushing out other countries like Russia and China in the process.

US officials deny any role in determining the contracts, showing that official statements only confirm what they deny. The so-called Production-Sharing Agreements effectively make Iraq pay for the war and the losses and damage caused.

Some officials like former Federal Reserve chairman Alan Greenspan have been more forthright upon retirement. Admitting that he had lobbied for the war, he conceded that it was “largely because of oil,” confirming what 75% of Iraqis and Americans already knew.

Iraqi oil is highly prized because of its quantity and quality. The reserves, among the world’s largest, are of a high grade and easy to access.

To get it, US officials are now pressuring Iraqi leaders to agree to a long-term military presence by July 31, exactly one month after the oil contracts are signed on June 30. This would extend the US military presence in the country beyond the UN mandate, a plan already seeing local resistance.

Among other things, US forces seek to retain the power to arrest Iraqis and detain them in US facilities, while US forces remain immune from prosecution in Iraqi courts. US forces also want no restriction on their presence in the country, without guaranteeing protection for Iraqis.

Meanwhile, Israel as a key US ally has been conducting major military exercises to prepare for an attack on Iran, raising oil prices further. Russia on Friday warned against such an attack, insisting that Moscow and the IAEA had found no evidence of Iranian nuclear weapons facilities.

An attack on Iran would again use the “weapons of mass destruction” excuse to topple another oil-rich nation’s leadership. So far the US war on Iraq has been highly successful, contrary to widespread opinion.

It has raised oil prices, increasing profits for oil cronies of the White House while restricting access by China and others. It has also changed Iraqi law to favour US interests and enabled US forces to remain indefinitely to protect those interests.


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