Crude oil politics in occupied Iraq

The theft of Iraq’s oil by the West has picked up speed. In typical colonial style, the great robbery is being facilitated by former officials of the Bush administration that had served in Iraq. These include Jay Garner, first head of the US occupation administration in Iraq following the invasion. He is advisor to the Canadian company Vast Exploration, which has a 37% stake in an oilfield in the Kurdish north. Peter Galbraith, US foreign policy advisor close to Vice President Joe Biden and Senator John Kerry, advised the Kurds about their rights when the Iraqi constitution was being drafted. He pushed through provisions that granted Kurds exclusive rights over oil and gas, of which he is now the principal beneficiary.

Galbraith received exploration rights to one of Kurdistan’s major oil fields in the Dohuk region in early 2004 after he negotiated a contract allowing the Norwegian oil company DNO to drill for oil there. These explosive revelations were made in the Norwegian newspaper Dagens Naeringsliv that discovered documents linking Galbraith to DNO. The paper wrote that when drillers struck oil in a rich new Tawke field in December 2005, no one but a handful of government and business officials and members of Galbraith’s inner circle knew that the constitutional provisions he had pushed through only months earlier could enrich him so handsomely. His potential earnings could top $100 million or more.

Galbraith is not alone in this great theft. Zalmay Khalilzad, former US ambassador to Afghanistan, Iraq and the UN, has established his own corporate consultancy firm in the Kurdish city of Irbil. Obviously, he is also looking for rich pickings.

Former US Vice President Dick Cheney is an oil man; as are his cohorts. In early 2003, he stated unabashedly that Iraq has “our oil under their soil.” Now they are going after it. On November 5, Iraq awarded development rights over the huge West Qurna oilfield in southern Iraq to Exxon-Mobil and Royal Dutch Shell. The “fruits” of the Iraq war at the expense of 1.3 million Iraqi lives and some $2 trillion in costs, are now being picked by Western, primarily US multinational companies, by gaining control of some of the largest oilfields in the world.

West Qurna’s proven oil reserves are 8.7 billion barrels compared to Iraq’s total reserves of 115 billion barrels. Before the March 2003 US invasion, the Iraqi regime of Saddam Husain had awarded this contract to Lukoil, Russia’s major oil company. The US-installed puppet regime in Baghdad tore up all such agreements and has signed new ones with Western multinationals under the watchful gaze of their American masters.

Exxon-Mobil is the first US-based oil giant to sign a 20-year contract that together with Dutch company Shell plans to boost daily production at West Qurna from 300,000 barrels to 2.3 million barrels per day over the next six years. The Iraqi regime has agreed to compensate the companies for the cost of upgrading the field; it may run as high as $50 billion. Further, they will be paid $1.90 for each barrel extracted. Happy days are here again for Western multinationals. The spilling of Iraqi blood is clearly cheaper than oil.

The Exxon-Mobil/Shell contract followed a similar deal signed with British Petroleum (BP) and China National Petroleum Corp (CNPC), on November 3 giving them development rights to the massive Rumaila field and its reserves of 17 billion barrels. The deals are classified as “service” agreements enabling the regime to bypass parliament that may not have approved such deals.

Other deals are in the pipeline, reversing nearly four decades of struggle to claw back control of the Middle East’s only and most precious commodity –” oil –” from rapacious multinational corporations. Iraq nationalised its oil industry in 1975 following a trend set up by Iran as early as 1953 that unfortunately led to its government being overthrown by a CIA-British led coup. A consortium made up of the US-based Occidental, Italy’s Eni and South Korea’s Kogas has signed a tentative agreement for the Zubair oilfield with reserves of 4 billion barrels. Japanese Nippon Oil, Eni and Spanish company Repsol are bidding for a field in Nasiriyah, which has similar-sized reserves. In Kirkuk (Iraqi Kurdistan), Royal Dutch Shell is negotiating a contract to develop untapped areas of a major oilfield, thought to have as much as 10 billion barrels in reserves despite being in production since 1934.

Western multinationals are about to be awash in windfall oil profits.