DISPATCHES FROM AMERICA All the oil news that's fit to print
By Nick Turse
On June 19, the New York Times broke the story in an article under the
headlines "Deals with Iraq Are Set to Bring Oil Giants Back: Rare No-Bid
Contracts, A Foothold for Western Companies Seeking Future Rewards". Finally,
after a long five years-plus, there was proof that the occupation of Iraq
really did have something or other to do with oil. Quoting unnamed Iraqi Oil
Ministry bureaucrats, oil company officials and an anonymous American diplomat,
Andrew Kramer of the Times wrote: "Exxon Mobil, Shell, Total and BP ... along
with Chevron and a number of smaller oil companies, are in talks with Iraq's
Oil Ministry for no-bid contracts to service Iraq's largest fields."
The news caused a minor stir, as other newspapers picked up
and advanced the story and the mainstream media, only a few years late, began
to seriously consider the significance of oil to the occupation of Iraq.
As always happens when, for whatever reason, you come late to a major story and
find yourself playing catch-up on the run, there are a few corrections and
blind spots in the current coverage that might be worth addressing before
another five years pass. In the spirit of collegiality, I offer the following
leads for the mainstream media to consider as they change gears from no comment
to hot pursuit when it comes to the story of Iraq's most sought after
commodity. I'm talking, of course, about that "sea of oil" on which, as deputy
secretary of defense Paul Wolfowitz pointed out in May 2003, the month after
Baghdad fell, Iraq "floats".
All the news that's fit to print department
In a June 30 follow-up piece, the Times' Kramer cited US officials (again
unnamed) as acknowledging the following, "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 ..."
In addition, he asserted, this "disclosure ... is the first confirmation of
direct involvement by the [George W] Bush administration in deals to open
Iraq's oil to commercial development and is likely to stoke criticism". This
scoop, however, reflected none of the evidence - long available - of the direct
involvement of Bush administration and US occupation officials in Iraq's oil
industry. In fact, since the taking of Baghdad in April 2003, the name of the
game has been facilitating relationships between Iraq and US-based and allied
Western energy firms when it came to what Bush used to delicately call Iraq's
"patrimony" of "natural resources".
For instance, almost a year ago, the Washington Post's Walter Pincus drew
attention to a call by Bush's Commerce Department for "an international legal
adviser who is fluent in Arabic 'to provide expert input, when requested' to
'US government agencies or to Iraqi authorities as they draft the laws and
regulations that will govern Iraq's oil and gas sector'." The document went on
to state, "As part of a US government inter-agency process, the US Department
of Commerce" would be "providing technical assistance to Iraq to create a legal
and tax environment conducive to domestic and foreign investment in Iraq's key
economic sectors, starting with the mineral resources sector."
This was no aberration. In March 2006, for instance, the US Army issued a
solicitation for a two-year contract "to allow any organization or entity to
support IRMO [Iraq Reconstruction Management Office] (US Embassy Baghdad) to
deliver an effective capacity development program utilizing predominantly US
and European firms, universities, institutes and professional organizations for
personnel within the Iraqi Ministry of Oil ..." This was to include
participation in "development programs" offered by "private companies",
long-term development through "commercial training entities in the United
States and Europe for oil and gas specialists from the Ministry of Oil", and
the implementation of "joint government-industry activities". Translated out of
bureaucratic contract-ese, this meant that the US would pay for programs to,
among other things, enhance relationships between the Iraq Oil Ministry and ...
you guessed it ... foreign firms.
In October 2006, the Department of Commerce (DOC) put out a call for experts
that was nearly identical to the later solicitation discovered by Pincus. They
were to aid a program facilitating "the creation of a legal and tax environment
conducive to domestic and foreign investment in Iraqs [sic] key economic
sectors, starting with the mineral resources sector" and provide "expertise to
DOC, to other [US government] agencies, or to Iraqi authorities on creating a
legal and tax environment conducive to domestic and foreign investment in Iraqs
[sic] oil and gas sector". Such an individual would, in fact, act "as a liaison
between [the DOC's technical assistance arm] and key stakeholders in Iraq (such
as Iraq's Ministry of Oil, or the oil authorities in Kurdistan)".
In fact, the US Trade and Development Agency notes that, in 2006 and 2007, it
funded a "$2.5 million multifaceted training program for the Iraqi Ministry of
Oil" to "provide critical knowledge transfer and establish long-term
relationships between the US and Iraqi oil and gas industry public and private
sector representatives".
It's worth recalling that Iraq's oil bureaucrats, about to receive such
"critical knowledge" and "expertise", were not exactly neophytes in the world
of oil management. They had effectively managed the Iraqi oil industry from the
time the five oil majors now slated to receive those "service contracts" were
tossed out of Iraq, when its industry was nationalized in 1972, until the
invasion of 2003. They had kept the country's oil infrastructure going even
after the disaster of the First Gulf War of 1990-1991, even through all the
desperate final years of sanctions against Saddam Hussein's regime.
The Pentagon-petroleum partnership
Another connection, long ignored in the mainstream, that reporters like Kramer
might consider pursuing when it comes to the complex ties among Iraqi
officials, the Bush administration, the Department of Defense (DoD), and Big
Oil is the overt Pentagon connection. The DoD is, as national security expert
Noah Shachtman notes, "the world's largest energy consumer". And, when it comes
to Pentagon gas-guzzling, its post-9/11 wars and occupations, especially in
Iraq, have been a boon. While the Bush administration has been working overtime
to clear the path for Big Oil's return to Iraq, the Pentagon has been paying
out staggering amounts of US taxpayer dollars to the very oil majors now
negotiating with Iraq's Ministry of Oil.
According to recent reports, the proposed Iraqi service contracts, which may be
paid off in cash or crude oil, will be worth $500 million each. That is roughly
what the Pentagon paid out on June 18 alone - the day before the Times broke
its story about Big Oil's return to Iraq - for natural gas and aviation fuel.
Over half the total amount, in excess of $268 million, was handed over to one
of the oil giants set to benefit from the Iraq deal: BP (formerly British
Petroleum). Only days earlier, two of the other majors from the coterie of
potential no-bid contractors, Exxon Mobil and Chevron, nabbed contracts from
the DoD - in Exxon Mobil's case, a $73 million deal for gasoline and fuel oil;
in Chevron's, a $16 million contract for aviation fuel.
Keep in mind, however, that - although you won't learn this in your daily paper
- this has long been standard operating procedure. Each of the oil giants named
in the original New York Times piece - Exxon Mobil, Shell, Total, BP, and
Chevron - regularly show up on the Pentagon's payroll. In fact, last year,
Iraq's new fave five took home more than $4.1 billion from the DoD - with Shell
leading the way with $2.1 billion.
It's no secret that the Pentagon relies on vast quantities of oil to power the
ships, planes, helicopters, heavy armor, and other ground vehicles essential to
its occupation of Iraq, nor that it regularly pays out vast sums of taxpayer
dollars to the very companies that US advisors have aided in working out oil
deals with the Iraq Oil Ministry. Despite ample evidence of the Pentagon
connection, this circular and mutually-reinforcing relationship has been almost
totally ignored in the mainstream media. But think of it this way: Your tax
dollars have given the Pentagon the opportunity to use up oil - bought from the
oil majors, in prodigious quantities - in order to create a situation in Iraq
in which those same majors will soon receive no-bid contracts to make money off
the Iraqi oil industry and, if all goes well, get far better, longer term deals
in the near future.
One big, happy, oily family
It turns out that, despite that story the Times broke as if something totally
new were on the horizon, the Bush administration has been facilitating ties
between the Iraqi government and foreign oil companies for years, and the same
companies now likely to nab a no-bid toehold in Iraq's oilfields are intimately
tied in to the Pentagon to the tune of billions of dollars annually. It's worth
noting that most of these firms have also been closely connected to Vice
President Dick Cheney from the early days of the Bush administration. In fact,
executives from Exxon Mobil, Shell, and BP met behind closed doors with
Cheney's energy task force in 2001, when the administration was pounding out
its energy policies, according to a White House document obtained by the
Washington Post. The Government Accountability Office also found that Chevron
was just one of several companies that "gave detailed energy policy
recommendations" to the task force.
It's almost impossible to tease out all the interconnections between Big Oil,
the White House, the Pentagon, and the Iraqi Ministry of Oil, since they are
tied together in a web of contracts and mutually supporting relationships built
up over many years. However, just in case the Times wants to set its staff
loose on the recent past, there is no mistaking the many ties that exist. (A
small tip for Times researchers: skip the Times archives, they will be of
little help.)
Should further evidence be necessary, when it comes to those US advisors at
work in Iraq, mainstream reporters need look no further than the solicitations
sent out by the Iraqi Ministry of Oil itself. Consider, for instance, a recent
"tender" for a contractor to drill "two deep exploration wells" in the South
Rumaila and Luhais oil fields in the Basra District of southern Iraq. Not only
does the solicitation (the deadline for which is July 27, 2008) contain special
instructions for "companies outside Iraq", but it asks potential contractors to
send their bids to the Ministry of Oil not in Arabic, but "in the English
language".
Nick Turse is the associate editor and research director of
Tomdispatch.com. His first book,
The Complex: How the Military Invades Our Everyday Lives, an exploration
of the new military-corporate complex in America, was recently published by
Metropolitan Books. His website, Nick Turse.com has been newly revamped and
expanded.
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