Naomi Klein on Bush and Iraq Oil

This is excerpted from the Canadian Dimension blog.
There is little mention or discussion of these contracts in the mainstream media. But that is not surprising since the Iraq war is never supposed to be about oil. I hadn't heard about the management contracts. As I understand it the contracts are not yet signed so there could be political opposition before they are finalised as there has been to the Oil Law. The Oil Law benchmark is never mentioned any more!

NAOMI KLEIN: Well, I think we’re seeing the Bush administration in its final months just handing out a series of gifts to the oil and gas industry, both at home, pushing for opening up the Arctic National Wildlife Refuge, and then in Iraq, the prize, the biggest prize of all, which is allowing foreign multinationals to gain control of Iraq’s oil fields. And we’re seeing a two-stage process now, and it isn’t over yet, where first there was the service—the short-term service agreements, no-bid contracts, that were announced. They haven’t been signed yet, but they’re going to the big oil companies that were kicked out of Iraq in the ’70s. They’re coming back.AMY GOODMAN: Explain how that works, these no-bid contracts, how it is—who’s signing these contracts?NAOMI KLEIN: OK. Well, at the moment, Iraq does not have an oil law, so Iraq can’t sign long-term exploration agreements, although they are doing it in Iraqi Kurdistan, and we’ve heard about this with Hunt Oil. But that’s—those are illegal contracts. They’re very precarious. There could be future expropriations. It’s really risky to go that route, because there isn’t a law. And we know it’s been a major push of this administration to get the Iraqi parliament to accept a US-backed oil law. This has been sold as a symbol of Iraqi unity. That’s not the way it’s seen in Iraq.
In Iraq, the reason why it has been years in resisting this oil law is because nationalizing the oil in Iraq was the centerpiece of the anti-colonial struggle, as it was in neighboring nations throughout the Arab world. And it is not just a pro-Saddam idea. It is not just a Baathist idea. It’s the core of Arab nationalism. And that victory is being protected by many political forces in Iraq, and most notably by the oil workers’ unions in Iraq, who said, “We don’t need these foreign multinationals to get the oil out of the ground. We can do it ourselves. We can bring in technical support without giving away management control, without giving away ownership control.”
And, I mean, but let’s stress here that unlike the oil offshore, unlike the shale, this is very difficult oil to extract. It’s extremely—it requires a huge amount of technology. It requires a huge amount of investment. And that’s part of the problem with what the Bush administration is selling. These—actually, they—the oil companies need the price of oil to stay high in order for it to be economically viable to do these—to get oil out of solid rock, for instance, which is very hard, very expensive. Offshore oil drilling, also very, very expensive—you have to build the rigs and so on. Iraq, no. Iraq, stick a straw in the ground and suck. I mean, this is incredibly accessible oil. And Iraqis actually know how to extract this oil themselves. So this idea that they need these foreign multinationals to come in is yet another myth.
And not only have companies like BP and Texaco been offered these no-bid contracts, but what’s strange about it is that they’re service contracts, and these are not oil service companies. So what’s significant about these contracts is that they appear to be giving these oil companies the right of first refusal on future, more significant contracts. So, one week after these smaller service agreements were announced, the Iraqi Oil Ministry announced that they also will be handing out longer-term management agreements, which will give oil companies the ability to manage existing fields in Iraq and hold onto 75 percent of the worth of those contracts and leave only 25 percent for Iraqis, which is absolutely unheard of in the region, where 51 percent for the country is the baseline for new exploration, for new fields. These are existing fields. They’re already working. The technology is already there. And these foreign companies are going to be taking 75 percent of the worth of those existing fields in Iraq. So it’s daylight robbery. It’s armed robbery, actually, Amy.

US British and Australian Forces build oil protection base in Iraq

This article shows how important oil is in terms of the Iraqi occupation. The press is virtually silent about the important construction projects going on at crucial oil export facilities. This is from the World Socialist Web Site.



US, British and Australian forces build oil-protection base in Iraq
By Patrick Martin
13 November 2007
The US Navy, with the assistance of British and Australian commandos, is building a permanent base to guard two oil-export platforms in Iraqi waters at the northern end of the Persian Gulf, according to a report Monday in the Wall Street Journal.

Troops from all three occupying countries are now stationed at the Khawr al Amaya oil terminal, protecting it and the neighboring Al Basrah oil terminal, facilities critical for any significant expansion of tanker shipments of Iraqi oil to the world market..

The Journal reported, “While presidential candidates debate whether to start bringing ground troops home from Iraq, the new construction suggests that one footprint of U.S. military power in Iraq isn’t shrinking anytime soon: American officials are girding for an open-ended commitment to protect the country’s oil industry.”

The military mission goes far beyond the patrols which US warships have conducted in the Persian Gulf for the past 30 years, in the name of keeping oil shipping lanes open. The Journal noted, “the Navy finds itself with an additional, much more specific role: playing security guard to Iraq’s offshore oil infrastructure.”

The current focus of military construction is a command-and-control facility located on top of the Khawr facility, the smaller of the two.

While the Pentagon claims that the new oil-terminal base is not a permanent US facility and that it will be turned over to Iraqi forces eventually, the Journal explains, “Iraqi forces are a long way from being able to take over the mission.” Vice Admiral Kevin Cosgriff, commander of US naval forces in the Gulf, told the newspaper, “They are going to need help for years to come.”

US, British and Australian military officers will control Iraq’s oil export shipping for the indefinite future. US sailors live on both the Khawr and Al Basrah terminals behind chain-link fences that keep out all Iraqis except the oil workers who actually operate the facilities, and a handful of Iraqi Marines who work as guards under the direction of an Australian commodore, the overall commander of the facility.

The Journal account also notes that the oil-export installation could play a role in forthcoming US moves against Iran: “The new outpost also offers a convenient perch from which to monitor Iran’s Revolutionary Guards Corps... The naval component of the Revolutionary Guards Corps operates from a partially submerged barge and crane visible on clear days.”

The British sailors captured earlier this year by Iranian forces were among those participating in the oil-protection mission—a fact that was suppressed in the media accounts at the time. That incident ended when the British prisoners made statements admitting they had crossed into Iranian waters and then were sent home. A similar episode involving American soldiers could well provide a pretext for a full-scale US military strike against Iran.

The oil-terminal operation is only one part of a much larger program, costing an estimated $277 million, in which US forces are deployed to protect Iraqi oilfields. The terminal facilities are the only ones where US military personnel are actually stationed inside production or shipping installations.

The Khawr and Al Basrah facilities combined, if working at their capacity, could load nearly two million barrels a day, about 2.4 percent of current world requirements.

Vice Admiral Cosgriff told the Journal, “As a contributor to an increasingly inelastic supply, that is a significant percentage. That isn’t just an Iraq issue, that’s a global economic-stability issue.”

This comment underscores the geopolitical economic interests at the heart of the US conquest of Iraq. US policymakers, from the military leaders on the spot right up to the White House, are acutely aware that, as former Federal Reserve chairman Alan Greenspan said last month, the war in Iraq is “all about oil.”

Nonetheless, the White House, the congressional Democrats and the American news media alike seek to downplay or suppress the role of oil, claiming that the war is being waged to fight “terrorism” and establish democracy in Iraq, when its major purpose is to rob the Iraqi people of their country’s principal natural resource, and give US and British multinationals first crack at the world’s third largest oil reserves.

The struggle for control and development of these resources is becoming increasingly public, despite the official effort to deny the predatory character of the American military occupation.

Iraq’s former oil minister, Thamir Ghadhban, who still advises the government of Iraqi Prime Minister Nouri al-Maliki on energy issues, told a US audience Friday that Iraq planned to nearly triple oil production over the next eight years, from the present 2.2 million barrels a day to six million barrels per day.

Speaking at Stanford University, Ghadhban said, “Iraq is one of the least-explored countries among the major oil producers,” citing plans to explore for oil in the western desert (Anbar province) as well as the traditional oil-producing regions in the north and south. Iraq has 112 billion barrels in proven oil reserves, but UN estimates have placed its probable but as yet unproven reserves at 214 billion barrels, perhaps the world’s largest pool of untapped oil.

The oil ministry reported last week that daily crude oil production in October hit a three-year high of 2.7 million barrels a day, of which 1.8 million barrels were exported. Hussein al-Shahristani, the oil minister, said that crude production should reach 3 million barrels daily by the end of the year.

The carve-up of oil territory continues within the country. The national government signed a short-term contract November 8 with the Turkish refiner Tupras to take 60,000 barrels a day from the Kirkuk oil fields, shipped by pipeline through the Turkish port of Ceyhan. It was the first new contract for Kirkuk crude in more than three years. The state oil ministry has invited 16 European and American oil companies to bid for three-month contracts to lift crude from Kirkuk, and some bids have already been received.

The Kurdistan regional government announced another round of production-sharing contracts, including one with Reliance Industries, an Indian firm, which paid a signing bonus of $15.5 million to $17.5 million for exploration contracts for two sites in the Kurdish-ruled provinces in the north of Iraq.

The federal Iraqi government has denounced the Kurdish deals as violations of national sovereignty. The mounting conflict between Baghdad and the Kurdistan regional government is facing multiple flashpoints, including a referendum, due to be held by the end of 2007, to decide whether the city of Kirkuk, at the center of one of the world’s largest oilfields, should be attached to the Kurdish-controlled region.

The city and province of Kirkuk have a mixed population of Kurds, Sunni and Shiite Arabs and Turkomen, but the Kurdish parties have been resettling Kurds there in an effort to create a majority, a mirror reversal of the policy pursued by Saddam Hussein, who pushed Kurds out and sought “Arabization” of the province.

Perhaps the most provocative action taken in the tense region came in September, when Ray Hunt, CEO of Hunt Oil and a longtime Texas confidant of the Bush family, flew into Kurdistan and signed an oil exploration agreement with the regional government, without informing Baghdad.

According to a report in the Dallas Morning News, the hill of Jebel Semroot, near the village of Assyan, where Hunt Oil expects to begin drilling next year, is not even in the territory of the three Kurdish provinces ruled by the regional government. It lies across the border in Nineveh, another province with a mixed population of Kurds, Turkomen and Arabs, in which the Kurds are a distinct minority.

“Trouble is, Jebel Semroot isn’t in Kurdish territory,” the News reported. “If Hunt Oil drills in these rocks, the company will be helping the Kurds absorb lands in Nineveh province that were historically Kurdish but are still claimed by Iraq’s Arab Sunnis