THE ROVING EYE Big Oil's 'secret' out of Iraq's closet By Pepe Escobar
NEW YORK - It is not about the "war on terror". It is not about weapons of mass
destruction. It is not about "freedom and democracy to the Iraqi people", or to
the "Afghan people". It is not about "Islamofascism". It is not about a
Pentagon-coined "arc of instability" from the Middle East to Central Asia. New
evidence shows once again both George W Bush administration wars - in
Afghanistan and Iraq - above all are about oil and gas.
Those were the days - up to a few days ago, actually - when the fateful words
"war" and "oil" would never have been aligned in the same sentence anywhere in
US corporate media; the days when former defense secretary and Pentagon supremo
Rumsfeld insisted Iraq had "literally nothing to do with oil".
But now the US and European Big Oil majors that controlled the Iraqi oil
industry up to the 1972 nationalization - today represented by Exxon Mobil,
Shell, BP, Total and Chevron - seem to be back with a vengeance. Thus the New
York Times, for instance, can redeem itself from printing Ahmad Chalabi-fed
weapons-of-mass-destruction nonsense on its front page for months and actually
engage in news that's fit to print.
This past Monday, the paper reported that "a group of American advisers led by
a small State Department team played an integral part in drawing up contracts
between the Iraqi government and five major Western oil companies to develop
some of the largest fields in Iraq".
The bland language may be misleading. This is no less than the first step in
the de facto de-nationalization of the Iraqi oil industry - Vice President Dick
Cheney's wet dream.
As James Paul, director of the Global Policy Forum, has summarized it, this is
... a new round of immensely profitable oil deals ...
announced by Iraqi Oil Minister Sharistani, in which giants like Exxon Mobil
can nail down long-term contracts and take away a large share of the oil from
several key operating fields, like the massive Rumaila and West Qurna, some of
the world's largest.
Oil can be produced in these fields for about one dollar a barrel, while its
value on world markets is now around US$140. With hundreds of millions of
dollars of profits at stake - and while the US occupation remains in full force
- the oil giants are making their move, seeking to bypass opposition in the
Iraqi parliament and ignoring suspicion and anger among the Iraqi public. With
world oil supplies visibly running short and oil prices skyrocketing, this is a
desperate gamble to control some of the world's largest and most lucrative
fields, at huge human and environmental cost.
Washington, no collective breath is being held, as it's extremely unlikely the
supine US Congress will be looking closer at whether the Bush administration is
bypassing the Biden amendment, which prohibits the use of US funds to "exercise
United States control over the oil infrastructure or oil resources of Iraq".
There's too much money to be made.
Big Oil hardball
Hussein al-Shahristani, the Iraqi oil minister, has always been a huge
cheerleader of Big Oil taking over the Iraq oil industry. He dreams of Iraq as
the world's second - or at least third-biggest - oil producer, competing with
Saudi Arabia and Russia. To get there he is frantically selling out, trying to
get voracious, predatory production sharing agreements (PSAs) over the heads of
the Iraqi parliament and even harassing Iraqi oil unions.
At this early stage it's still about TSAs (technical support agreements); these
are simple consultancy contracts to help Iraq raise its oil production by
500,000 barrels a day, not long-term contracts to develop juicy oil and gas
But oops! Iraqis have not been fooled by the smoke and mirrors - nor by Big Oil
hardball. At a press conference in Baghdad on Monday, Shahristani had to admit,
"We did not finalize any agreement ... because they refused to offer
consultancy based on fees, as they wanted a share of the oil." Big Oil, of
course, wants the "Big Prize" (copyright Cheney).
What Cheney and Big Oil really want is to wallow in the extra-profitable
30-year PSAs once the new, International Monetary Fund-redacted Iraqi oil law
is forced through the gorges of the Iraqi parliament, sealing a major
US-European takeover - the whole thing, of course, protected by a Status of
Forces Agreement with its 58 US military bases, total control of Iraqi
airspace, total legal immunity for US soldiers and the right for the Pentagon
to turn Iraq upside down without even asking the hosts.
And make no mistake, that's what the US power elite always wanted.
Greg Muttit, co-director of the London-based oil industry research group
Platform, explains that what's at stake at the current stage are "nine-year
risk service contracts for six oilfields"; these are "halfway between TSAs and
PSAs". Bids are due by March 2009, with signing in June 2009. As for the
technical service contracts for five of the same oilfields, these are "no-bid
contracts whose terms were dictated by the oil companies themselves". In other
words: Big Oil is telling the Iraqi government what it wants.
And here's the catch. Muttit says, "The tendering of these fields is a big
policy change, as producing fields were supposed to be developed by the Iraq
National Oil Company [INOC], with only new fields allocated to foreign oil
companies." Big Oil, though, wants the whole cake. INOC gets only a shabby 25%
stake. Muttit makes an enlightening comparison with Libya, "where the national
oil company gets around 80%, which is much more normal for fields of this
Meanwhile, in Central Asia ...
Bush/Cheney, unfazed by their own regime's death throes - and following what
was already official policy under former present Bill Clinton - now are also
poised to have one more crack at the New Great Game in Central Asia, trying to
thwart regional energy supremacy by both Russia and Iran.
Last April, Afghanistan, Turkmenistan, Pakistan and India signed a Gas Pipeline
Framework Agreement, deciding - not for the first time - to build the $7.6
billion TAP (now TAPI) pipeline that would deliver natural gas from
Turkmenistan to Pakistan and probably India, cutting right through the heart of
Afghanistan's Kandahar province, where the neo-Taliban are merrily running
rings around the forces of the North Atlantic Treaty Organization.
Construction should start in 2010, with gas being supplied by 2015. The project
is backed by the Manila-based Asian Development Bank. The government of Afghan
President Hamid Karzai, which cannot even provide security for a few streets in
central Kabul, has engaged in Hollywood-style suspension of disbelief by
assuring unsuspecting customers it will not only get rid of millions of land
mines blocking TAPI's route, it will get rid of the Taliban themselves.
Inevitably, US Assistant Secretary of State Richard Boucher weighed in, saying
the US has a "fundamental strategic interest" in Afghanistan, without making a
single reference to the words "oil" or "gas". In real life, with this move
Bush/Cheney believe they can block the $7.5 billion Iran-Pakistan-India (IPI)
pipeline, also known as the "peace" pipeline. Fat chance. The three countries
are all on board and the pipeline, delivering Iranian gas to South Asia, is a
This new US adventure has also sent a frantic red alert right to the core of
the Canadian government, which is now contemplating the geopolitical nightmare
of having its troops, alongside NATO's, protecting a fragile pipeline in a war
zone. The conservatives in power in Canada have committed to keep troops in
Afghanistan at least until 2011.
The Canadian Center for Policy Alternatives released a report, A Pipeline
Through a Troubled Land: Afghanistan, Canada and the New Great Energy Game,
written by John Foster, energy economist and former lead economist of
PetroCanada, depicting TAPI as turning Afghanistan into "an energy bridge"
between Central and South Asia. But Foster is very worried "the quest for
'energy security' risks drawing Canada unwittingly into a new Great Energy
Were investors, perhaps nursed by Afghan opium, to be delirious enough to build
such a pipeline - and that's a monumental if - Afghanistan would collect a mere
$160 million a year in transit fees. Well, that's maybe not so grim considering
it's the equivalent of 50% of Karzai's current annual revenue. The Taliban
would love to get a piece of the action.
Forget about all that old 2001 "bringing freedom to Afghan women" rhetoric.
TAP's roller-coaster history goes back to the mid-1990s Clinton era, when the
Taliban were wined and dined by California-based Unocal - and the Clinton
machine. Unocal beat the competition, led by Argentina's Bridas. The
negotiations broke down because of money - those pesky transit fees. At the
Group of Eight summit in Naples in July 2001 it was decided the US would take
out the Taliban by October; September 11, 2001, accelerated the schedule by a
One of the first actual fruits of the US bombing of Afghanistan in 2001 was
that in December, Karzai, Pakistan's President Pervez Musharraf and
Turkmenistan's wacky Nyazov (now dead) signed an agreement committing
themselves to build TAP (by then known as the Trans-Afghan Pipeline). The
Russians decided to wait for their counterpunch, and delivered it in style in
Gazprom accepted a 40% price increase demanded by Nyazov for his gas. In
return, the Russians got priceless gifts: control of all of Turkmenistan's gas
surplus up to 2009; a preference for Russia to tap the new Yolotan gas fields;
and Turkmenistan bowing out of any Trans-Caspian pipeline project. Nyazov
pledged to supply all his country's gas to Russia.
Thus, dead on arrival, lay TAP, the (invisible) star of the "good" Afghan war,
as Democratic senator and presidential hopeful Barack Obama now sees it.
Washington's plan has always been to seduce Nyazov to provide Turkmenistan gas
to the Baku-Tblisi-Ceyhan (BTC) pipeline, and then to TAP. This was part of a
US grand strategy of a "Greater Central Asia" centered on Afghanistan and
Bush/Cheney will never give up. But India will go ahead with the Iranian
pipeline. And Turkmenistan is selling all its surplus gas to Russia. Who needs
a $7.6 billion, 1,600-kilometer steel serpent in a war zone?
It ain't over till the fat (oil) lady sings. But if the Bush administration
"vision" of a perpetual Iraqi puppet regime, with its oil wealth confiscated
and under the imperial boot, takes hold, alongside the Taliban having a long
pipeline to play with in Afghanistan, the least one can expect is a lot more
blood on the tracks.