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2 The Iraq oil grab that went
awry By Dilip Hiro
Here is the sentence in The Age of
Turbulence, the 531-page memoir of former
Federal Reserve chief Alan Greenspan, that caused
so much turbulence in Washington last week: "I am
saddened that it is politically inconvenient to
acknowledge what everyone knows: the Iraq war is
largely about oil." Honest and accurate, it had
the resonance of Bill Clinton's election campaign
mantra, "It's the economy, stupid." But, finding
himself the target of a White House attack - an
administration spokesman labeled
his
comment "Georgetown cocktail party analysis" -
Greenspan backtracked under cover of verbose
elaboration. None of this, however, made an iota
of difference to the facts on the ground.
Here is a prosecutor's brief for the
position that "the Iraq war is largely about oil".
The primary evidence indicating that the
administration of US President George W Bush
coveted Iraqi oil from the start comes from two
diverse but impeccably reliable sources: Paul
O'Neill, the treasury secretary (2001-03) under
President Bush; and Falah al-Jibury, a
well-connected Iraqi-American oil consultant, who
had acted as president Ronald Reagan's "back
channel" to Iraqi president Saddam Hussein during
the Iraq-Iran War of 1980-88. The secondary
evidence is from material that can be found in
such publications as the New York Times and the
Wall Street Journal.
According to
O'Neill's memoirs, The Price of Loyalty: George
W Bush, the White House and the Education of Paul
O'Neill, written by journalist Ron Suskind and
published in 2004, the top item on the agenda of
the National Security Council's first meeting
after Bush entered the Oval Office was Iraq. That
was January 30, 2001, more than seven months
before the September 11 attacks. The next NSC
meeting, on February 1, was devoted exclusively to
Iraq.
Advocating "going after Saddam"
during the January 30 meeting, defense secretary
Donald Rumsfeld said, according to O'Neill,
"Imagine what the region would look like without
Saddam and with a regime that's aligned with US
interests. It would change everything in the
region and beyond. It would demonstrate what US
policy is all about." He then discussed
post-Saddam Iraq - the Kurds in the north, the
oilfields, and the reconstruction of the country's
economy (Suskind, p 85).
Among the
relevant documents later sent to NSC members,
including O'Neill, was one prepared by the Defense
Intelligence Agency (DIA). It had already mapped
Iraq's oilfields and exploration areas, and listed
US corporations likely to be interested in
participating in Iraq's petroleum industry.
Another DIA document in the package,
titled "Foreign Suitors for Iraqi Oilfield
Contracts", listed companies from 30 countries -
France, Germany, Russia and Britain, among others
- their specialties and bidding histories. The
attached maps pinpointed "super-giant oilfield",
"other oilfield" and "earmarked for production
sharing" and divided the basically undeveloped but
oil-rich southwest of Iraq into nine blocks,
indicating promising areas for future exploration
(Suskind, p 96).
According to high-flying
oil insider Falah al-Jibury, the US administration
began making plans for Iraq's oil industry "within
weeks" of Bush taking office in January 2001. In
an interview with the British Broadcasting Corp's
Newsnight program, which aired on March 17,
2005, he referred to his participation in secret
meetings in California, Washington and the Middle
East, where, among other things, he interviewed
possible successors to Saddam.
By January
2003, a plan for Iraqi oil crafted by the State
Department and oil majors emerged under the
guidance of Amy Myers Jaffe of the James A Baker
III Institute for Public Policy at Rice University
in Houston. It recommended maintaining the
state-owned Iraq National Oil Co, whose origins
dated to 1961 - but open it up to foreign
investment after an initial period in which
US-approved Iraqi managers would supervise the
rehabilitation of the war-damaged oil
infrastructure. The existence of this group would
come to light in a report by the Wall Street
Journal on March 3, 2003.
Unknown to the
architects of this scheme, according to the same
BBC Newsnight report, the Pentagon's
planners, apparently influenced by powerful
neo-conservatives in and out of the
administration, had devised their own super-secret
plan. It involved the sale of all Iraqi oilfields
to private companies with a view to increasing
output well above the quota set by the
Organization of the Petroleum Exporting Countries
for Iraq to weaken, and then destroy, OPEC.
Secondary evidence On October
11, 2002, the New York Times reported that the
Pentagon already had plans to occupy and control
Iraq's oilfields. The next day The Economist
described how Americans in the know had dubbed the
waterway demarcating the southern borders of Iraq
and Iran "Klondike on the Shatt al-Arab", while
Ahmad Chalabi, head of the US-funded Iraqi
National Congress and a neo-con favorite, had
already delivered this message: "American
companies will have a big shot at Iraqi oil - if
he gets to run the show."
On October 30,
Oil and Gas International revealed that the Bush
administration wanted a working group of 12-20
people to (a) recommend ways to rehabilitate the
Iraqi oil industry "to increase oil exports to
partially pay for a possible US military
occupation government", (b) consider Iraq's
continued membership of OPEC, and (c) consider
whether to honor contracts Saddam Hussein had
granted to non-US oil companies.
By late
October 2002, columnist Maureen Dowd of the New
York Times would later reveal, Halliburton, the
energy-services company previously headed by US
Vice President Dick Cheney, had prepared a
confidential 500-page document on how to handle
Iraq's oil industry after an invasion and
occupation of that country. This was, commented
Dowd, "a plan [Halliburton] wrote several months
before the invasion of Iraq, and before it got a
no-bid contract to implement the plan (and
overbill the US)". She also pointed out that a
Times request for a copy of the plan evinced a
distinct lack of response from the Pentagon.
In public, of course, the Bush
administration built its case for an invasion of
Iraq without referring to that country's oil or
the fact that it had the third-largest reserves of
petroleum in the world. But what happened out of
sight was another matter. At a secret NSC briefing
for the president on February 24, 2003, titled
"Planning for the Iraqi Petroleum Infrastructure",
a State Department economist, Pamela Quanrud, told
Bush that it would cost US$7 billion to $8 billion
to rebuild the oil infrastructure if Saddam
decided to blow up his country's oil wells,
according to Washington Post reporter Bob Woodward
in his 2004 book Plan of Attack (pp
322-323). Quanrud was evidently a member of the
State Department group chaired by Amy Myers Jaffe.
When the Anglo-American troops invaded on
March 20, 2003, they expected to see oil wells
ablaze. Saddam proved them wrong. Being a staunch
nationalist, he evidently did not want to go down
in history as the man who damaged Iraq's most
precious natural resource.
On entering
Baghdad on April 9, US troops stood by as looters
burned and ransacked public buildings, including
government ministries - except for the Oil
Ministry, which they guarded diligently. Within
the next few days, at a secret meeting in London,
the Pentagon's scheme of the sale of all Iraqi
oilfields got a go-ahead in principle.
The
Bush administration's assertions that oil was not
a prime reason for invading Iraq did not fool
Iraqis, though. A July 2003 poll of Baghdad
residents - who represented a quarter of the
Iraqi
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