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A Matter of Life, Death - and Oil
Weapons of mass destruction are cited as the spur for action. Perhaps the real motive is something just as urgent?
by Terry Macalister, Ewen MacAskill, Rory McCarthy in Baghdad, The Guardian
January 23rd, 2003
One of the most popular themes on the placards of anti-war
demonstrators across the US and Europe is that the looming
confrontation is primarily about oil. US and British
ministers dismiss such a charge as the stuff of conspiracy
theorists, and instead argue that the Iraqi president,
Saddam Hussein, has to be dealt with for one reason: the
threat posed by weapons of mass destruction.
And, yet, western powers have been fighting over Iraq's
"black gold" for decades. Travelling through the country,
it is immediately obvious why this is such a great prize in
energy terms.
Around Mosul in the north, flares from oil wells can be
seen at regular intervals in the otherwise empty
grasslands; even in the centre of the country, in Baghdad,
the skyline is lit by the al-Dohra oil refinery; and
further south, in the desert scrubland round Basra, there
is a huge concentration of wells.
Iraq has the second biggest known oil reserves in the
world, after Saudi Arabia. But its facilities have been
starved of investment over the last few decades, partly
because of war and partly because of sanctions. The vast al-
Dohra facility is a symbol of all that is wrong. In an
advanced state of decay, rusting pipes link a series of
large, sand-coloured storage tanks, almost every one of
which is crudely patched with sheets of steel.
At present Iraq exports around 1.5m barrels a day but
energy experts say this could be increased to 6m barrels
within five years after reinvestment. The US needs access
to new energy reserves. American industry and motorists are
guzzling gasoline at a rate that easily outstrips the rest
of the world while domestic reserves are running out at a
time when demand is set to leap.
The US energy department frightened politicians with a
study in 2001 known as the Cheney report after the former
head of Halliburton oil services group, now US vice-
president, who wrote it. He predicted that imported oil
would need to rise from 10.4 million barrels a day at
present to 16.7 million barrels a day by 2020.
The report spelled out the US dependence on a stable energy
market and the need for a foreign policy that would protect
America's energy supply. "In a global energy marketplace,
US energy and economic security are directly linked not
only to our domestic and international energy supplies, but
to those of our trading partners as well," it said. "A
significant disruption in world oil supplies could
adversely affect our economy and/or ability to promote
foreign and economic policy objectives, regardless of the
level of US dependence on oil imports."
George Bush, like Mr Cheney, is a former oil man, as are
many of his close staff, so they need no lessons on how the
energy world works. As politicians, they also know that
their voters' commitment to cheap and available petrol for
their car is seen as an inalienable right not far short of
bearing arms.
Traditionally, America looked to Saudi Arabia and Venezuela
for its crude supplies. But since the September 11
terrorist attacks, carried out in the main by Saudi
nationals, the former important Middle East ally has been
deemed unreliable while political turmoil in Venezuela has
virtually halted exports to the US.
Washington has been wooing Russia and African nations to
secure future supplies but there is nothing like the ultra-
cheap-to-produce reserves in Iraq sitting just below the
desert sands.
Professor Peter Odell, professor emeritus of international
energy studies at Erasmus University in Rotterdam and a
visiting professor at the London School of Economics,
rejected the view that oil was the main driving force
behind the current Iraq frenzy. "Its not all about oil.
There are other factors such as US fears about weapons of
mass destruction, revenge for earlier failures and the fact
they believe Iraq has not behaved properly towards the US
for 20 years," he said. "My own view is that an attack will
lead to destruction of Iraqi oilfields as happened in
Kuwait and there could be severe oil market problems in the
short term. Longer-term, Russia and France have pre-emptive
rights for deals done or money owned by Iraq but clearly
the US will get in on the act [on redeveloping Iraqi
oilfields]."
Paul Slater, who owned and ran a tanker fleet hired out to
Shell and is a leading figure in the independent tanker
owners association (Intertanko), is less certain. "I think
oil is a major issue which cannot be left out of the
equation although whether it is the major driver I don't
know."
It is not just wild-eyed western peaceniks that believe oil
is at the centre - or close to the centre - of the pending
conflict. It is quite a commonly held view even in the
conservative business world but few are willing to express
such things publicly.
Fadel Gheit, a former Mobil chemical engineer and now an
investment specialist with New York brokerage firm
Fahnestock & Co, told 50 of the largest pension funds and
financial investors in America before Christmas that the
expected war was "all about oil" and that the global fight
against terrorism was just "camouflage" to mask the real
purpose.
Later he told the Guardian: "The Americans have nothing
against the people of Iraq but our way of life is dependent
on 20m barrels a day and half of it has to be imported. We
are like a patient on oil dialysis. It's a matter of life
and death. The smart people [in Washington] all know this
but its not generally advertised on the kind of shows that
most people watch: MTV and soap operas."
Mr Gheit said a strike against Iraq has become vital in the
eyes of Washington because politicians and security chiefs
fear that Saudi Arabia, the traditional provider of US oil,
is a political "powder keg" that is going to explode from
within. "Of the 22m people in Saudi Arabia, half are under
the age of 25 and half of them have no jobs. Many want to
see the end of the ruling royal family and whether it takes
five months or five years, their days are numbered. If
Saudi Arabia fell into the hands of Muslim fundamentalists
and the exports were stopped, there is not enough spare oil
anywhere else to make up the shortfall."
But Dr Charles Tripp, head of politics at the School of
Oriental and African Studies, argues that the idea that
oilfields need to be physically seized in order to be
controlled is outdated. "Oil is a part of this," said Dr
Tripp. "But it is as much to do with asserting American
power."
Oil was key factor in the first Gulf war, along with
protecting the sovereignty of a United Nations member. This
time round "oil" is a word that politicians and officials
in both Washington and London are almost afraid to speak,
fearful of how it will play in the Arab world.
An independent working group part-sponsored by the Council
on Foreign Relations has just handed over a report to Mr
Bush entitled Guilding Principles for US Post-Conflict
Policy in Iraq. It argues: "Iraqis have the capability to
manage the future direction of their oil industry. A heavy
American hand will only convince them, and the rest of the
world, that the operation against Iraq was undertaken for
imperialist, rather than disarmament reasons. It is in
America's interest to discourage such misconceptions."
The international oil companies are already circling. The
US and British accuse the Russians and especially the
French of playing dangerous games with Iraq, keeping in
with Baghdad in the hope of securing favourable oil
contracts.
The French foreign ministry is infuriated by the
suggestion. One French diplomat challenged journalists to
look at what was really happening and insisted that they
would find it was US companies that were making the running
to secure a share of Iraqi oil.
Senior oil executives generally want to avoid talking
publicly about the issue but privately they say it is
"rubbish" to suggest that they need Iraq so much that they
would support a war. Mark Moody-Stuart, a director of Shell
and its former chairman went further, telling the Guardian
that a military strike would unhinge the Middle East and
was therefore a "recipe for disaster".
So what do the people at the centre of the impending war
think? "Our oil is the main reason America wants to attack
Iraq," said Ali al-Rawi, head of the economics department
at Baghdad University. "They want to control our oil and
control price and production levels. They know the future
oil resources for the world will continue to come from this
area for many years."
US administration's foot on the gas
George W Bush
Unsuccessful Texas oilman. His prospecting company,
Arbusto, was on the point of going bankrupt when it was
bought out by another company, Spectrum, which in turn was
bought out by another oil firm, Harken, which kept Bush on
the board for his contacts, primarily with his father.
Dick Cheney
Before becoming vice-president, Cheney, below, was the
chief executive of Halliburton, the world's largest
oilfield services company. Halliburton does not drill for
oil but it sells everything to the corporations that do the
drilling. It also provides housing and services for the US
military.
Condoleezza Rice
Before coming to the White House the national security
adviser sat on the board of Chevron. They were clearly
happy with her strategic advice and Bush family contacts as
they named an oil tanker after her.
Don Evans
Old Bush friend from Texas oil days. Evans stayed in the
oil business. Before becoming commerce secretary, he was
the chairman of Tom Brown Inc, a $1.2bn oil and gas company
based in Denver, and also sat on the board of TMBR/Sharp
Drilling, an oil and gas drilling operation.
Gale Norton
Environmentalists objected to her appointment as interior
secretary because of her oil links. As a lawyer she had
represented Delta Petroleum. She also ran an organisation
called the Coalition of Republican Environmental Advocates,
co-funded by BP Amoco.
-----------------------------------------------------------------------------------
Straw admits oil is key priority by Ewen MacAskill, diplomatic editor, The Guardian, UK, January 7th, 2003
The foreign secretary, Jack Straw, yesterday pinpointed for the first time security of energy sources as a key priority of British foreign policy. Mr Straw listed energy as one of seven foreign policy priorities when he addressed a meeting of 150 British ambassadors in London. The US and British governments officially deny that oil is a factor in the looming war with Iraq, but some ministers and officials in Whitehall say privately that oil is more important in the calculation than weapons of mass destruction. These ministers and officials have pointed to the instability of current oil sources - the Middle East, Caspian region and Algeria - and the need for secure alternatives. Iraq has the second biggest known oil reserves in the world. Mr Straw told ambassadors that, following a review he ordered last year, the Foreign Office drew up a list of seven medium to long-term strategic priorities, including "to bolster the security of British and global energy supplies".
-----------------------------------------------------------------------------------
In Iraqi War Scenario, Oil Is Key Issue
U.S. Drillers Eye Huge Petroleum Poolby
Dan Morgan and David B. Ottaway, The Washington Post, September 15th, 2002
A 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.Although 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.The 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."It's 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."But 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 them."
(...)
Even so, American oil companies have been banished from direct involvement in Iraq since the late 1980s, when relations soured between Washington and Baghdad.
Hussein 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.
While 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.
Last 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.
The 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. (...)
Weapons of mass destruction are cited as the spur for action. Perhaps the real motive is something just as urgent?
by Terry Macalister, Ewen MacAskill, Rory McCarthy in Baghdad, The Guardian
January 23rd, 2003
One of the most popular themes on the placards of anti-war
demonstrators across the US and Europe is that the looming
confrontation is primarily about oil. US and British
ministers dismiss such a charge as the stuff of conspiracy
theorists, and instead argue that the Iraqi president,
Saddam Hussein, has to be dealt with for one reason: the
threat posed by weapons of mass destruction.
And, yet, western powers have been fighting over Iraq's
"black gold" for decades. Travelling through the country,
it is immediately obvious why this is such a great prize in
energy terms.
Around Mosul in the north, flares from oil wells can be
seen at regular intervals in the otherwise empty
grasslands; even in the centre of the country, in Baghdad,
the skyline is lit by the al-Dohra oil refinery; and
further south, in the desert scrubland round Basra, there
is a huge concentration of wells.
Iraq has the second biggest known oil reserves in the
world, after Saudi Arabia. But its facilities have been
starved of investment over the last few decades, partly
because of war and partly because of sanctions. The vast al-
Dohra facility is a symbol of all that is wrong. In an
advanced state of decay, rusting pipes link a series of
large, sand-coloured storage tanks, almost every one of
which is crudely patched with sheets of steel.
At present Iraq exports around 1.5m barrels a day but
energy experts say this could be increased to 6m barrels
within five years after reinvestment. The US needs access
to new energy reserves. American industry and motorists are
guzzling gasoline at a rate that easily outstrips the rest
of the world while domestic reserves are running out at a
time when demand is set to leap.
The US energy department frightened politicians with a
study in 2001 known as the Cheney report after the former
head of Halliburton oil services group, now US vice-
president, who wrote it. He predicted that imported oil
would need to rise from 10.4 million barrels a day at
present to 16.7 million barrels a day by 2020.
The report spelled out the US dependence on a stable energy
market and the need for a foreign policy that would protect
America's energy supply. "In a global energy marketplace,
US energy and economic security are directly linked not
only to our domestic and international energy supplies, but
to those of our trading partners as well," it said. "A
significant disruption in world oil supplies could
adversely affect our economy and/or ability to promote
foreign and economic policy objectives, regardless of the
level of US dependence on oil imports."
George Bush, like Mr Cheney, is a former oil man, as are
many of his close staff, so they need no lessons on how the
energy world works. As politicians, they also know that
their voters' commitment to cheap and available petrol for
their car is seen as an inalienable right not far short of
bearing arms.
Traditionally, America looked to Saudi Arabia and Venezuela
for its crude supplies. But since the September 11
terrorist attacks, carried out in the main by Saudi
nationals, the former important Middle East ally has been
deemed unreliable while political turmoil in Venezuela has
virtually halted exports to the US.
Washington has been wooing Russia and African nations to
secure future supplies but there is nothing like the ultra-
cheap-to-produce reserves in Iraq sitting just below the
desert sands.
Professor Peter Odell, professor emeritus of international
energy studies at Erasmus University in Rotterdam and a
visiting professor at the London School of Economics,
rejected the view that oil was the main driving force
behind the current Iraq frenzy. "Its not all about oil.
There are other factors such as US fears about weapons of
mass destruction, revenge for earlier failures and the fact
they believe Iraq has not behaved properly towards the US
for 20 years," he said. "My own view is that an attack will
lead to destruction of Iraqi oilfields as happened in
Kuwait and there could be severe oil market problems in the
short term. Longer-term, Russia and France have pre-emptive
rights for deals done or money owned by Iraq but clearly
the US will get in on the act [on redeveloping Iraqi
oilfields]."
Paul Slater, who owned and ran a tanker fleet hired out to
Shell and is a leading figure in the independent tanker
owners association (Intertanko), is less certain. "I think
oil is a major issue which cannot be left out of the
equation although whether it is the major driver I don't
know."
It is not just wild-eyed western peaceniks that believe oil
is at the centre - or close to the centre - of the pending
conflict. It is quite a commonly held view even in the
conservative business world but few are willing to express
such things publicly.
Fadel Gheit, a former Mobil chemical engineer and now an
investment specialist with New York brokerage firm
Fahnestock & Co, told 50 of the largest pension funds and
financial investors in America before Christmas that the
expected war was "all about oil" and that the global fight
against terrorism was just "camouflage" to mask the real
purpose.
Later he told the Guardian: "The Americans have nothing
against the people of Iraq but our way of life is dependent
on 20m barrels a day and half of it has to be imported. We
are like a patient on oil dialysis. It's a matter of life
and death. The smart people [in Washington] all know this
but its not generally advertised on the kind of shows that
most people watch: MTV and soap operas."
Mr Gheit said a strike against Iraq has become vital in the
eyes of Washington because politicians and security chiefs
fear that Saudi Arabia, the traditional provider of US oil,
is a political "powder keg" that is going to explode from
within. "Of the 22m people in Saudi Arabia, half are under
the age of 25 and half of them have no jobs. Many want to
see the end of the ruling royal family and whether it takes
five months or five years, their days are numbered. If
Saudi Arabia fell into the hands of Muslim fundamentalists
and the exports were stopped, there is not enough spare oil
anywhere else to make up the shortfall."
But Dr Charles Tripp, head of politics at the School of
Oriental and African Studies, argues that the idea that
oilfields need to be physically seized in order to be
controlled is outdated. "Oil is a part of this," said Dr
Tripp. "But it is as much to do with asserting American
power."
Oil was key factor in the first Gulf war, along with
protecting the sovereignty of a United Nations member. This
time round "oil" is a word that politicians and officials
in both Washington and London are almost afraid to speak,
fearful of how it will play in the Arab world.
An independent working group part-sponsored by the Council
on Foreign Relations has just handed over a report to Mr
Bush entitled Guilding Principles for US Post-Conflict
Policy in Iraq. It argues: "Iraqis have the capability to
manage the future direction of their oil industry. A heavy
American hand will only convince them, and the rest of the
world, that the operation against Iraq was undertaken for
imperialist, rather than disarmament reasons. It is in
America's interest to discourage such misconceptions."
The international oil companies are already circling. The
US and British accuse the Russians and especially the
French of playing dangerous games with Iraq, keeping in
with Baghdad in the hope of securing favourable oil
contracts.
The French foreign ministry is infuriated by the
suggestion. One French diplomat challenged journalists to
look at what was really happening and insisted that they
would find it was US companies that were making the running
to secure a share of Iraqi oil.
Senior oil executives generally want to avoid talking
publicly about the issue but privately they say it is
"rubbish" to suggest that they need Iraq so much that they
would support a war. Mark Moody-Stuart, a director of Shell
and its former chairman went further, telling the Guardian
that a military strike would unhinge the Middle East and
was therefore a "recipe for disaster".
So what do the people at the centre of the impending war
think? "Our oil is the main reason America wants to attack
Iraq," said Ali al-Rawi, head of the economics department
at Baghdad University. "They want to control our oil and
control price and production levels. They know the future
oil resources for the world will continue to come from this
area for many years."
US administration's foot on the gas
George W Bush
Unsuccessful Texas oilman. His prospecting company,
Arbusto, was on the point of going bankrupt when it was
bought out by another company, Spectrum, which in turn was
bought out by another oil firm, Harken, which kept Bush on
the board for his contacts, primarily with his father.
Dick Cheney
Before becoming vice-president, Cheney, below, was the
chief executive of Halliburton, the world's largest
oilfield services company. Halliburton does not drill for
oil but it sells everything to the corporations that do the
drilling. It also provides housing and services for the US
military.
Condoleezza Rice
Before coming to the White House the national security
adviser sat on the board of Chevron. They were clearly
happy with her strategic advice and Bush family contacts as
they named an oil tanker after her.
Don Evans
Old Bush friend from Texas oil days. Evans stayed in the
oil business. Before becoming commerce secretary, he was
the chairman of Tom Brown Inc, a $1.2bn oil and gas company
based in Denver, and also sat on the board of TMBR/Sharp
Drilling, an oil and gas drilling operation.
Gale Norton
Environmentalists objected to her appointment as interior
secretary because of her oil links. As a lawyer she had
represented Delta Petroleum. She also ran an organisation
called the Coalition of Republican Environmental Advocates,
co-funded by BP Amoco.
-----------------------------------------------------------------------------------
Straw admits oil is key priority by Ewen MacAskill, diplomatic editor, The Guardian, UK, January 7th, 2003
The foreign secretary, Jack Straw, yesterday pinpointed for the first time security of energy sources as a key priority of British foreign policy. Mr Straw listed energy as one of seven foreign policy priorities when he addressed a meeting of 150 British ambassadors in London. The US and British governments officially deny that oil is a factor in the looming war with Iraq, but some ministers and officials in Whitehall say privately that oil is more important in the calculation than weapons of mass destruction. These ministers and officials have pointed to the instability of current oil sources - the Middle East, Caspian region and Algeria - and the need for secure alternatives. Iraq has the second biggest known oil reserves in the world. Mr Straw told ambassadors that, following a review he ordered last year, the Foreign Office drew up a list of seven medium to long-term strategic priorities, including "to bolster the security of British and global energy supplies".
-----------------------------------------------------------------------------------
In Iraqi War Scenario, Oil Is Key Issue
U.S. Drillers Eye Huge Petroleum Poolby
Dan Morgan and David B. Ottaway, The Washington Post, September 15th, 2002
A 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.Although 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.The 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."It's 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."But 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 them."
(...)
Even so, American oil companies have been banished from direct involvement in Iraq since the late 1980s, when relations soured between Washington and Baghdad.
Hussein 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.
While 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.
Last 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.
The 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. (...)
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