The Bush Administration Strikes Oil in Iraq  

Nick Turse's latest article at TomDispatch has a look at the no bid contracts that handed over a lot of Iraqi oil to the western oil majors.

On June 19th, the New York Times broke the story in an article headlined "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 way back in May 2003, the month after Baghdad fell, Iraq "floats."

In a June 30th follow-up piece, the Times's Kramer cited U.S. 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 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 U.S. 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 U.S.-based and allied Western energy firms when it came to what President 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 'U.S. 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 that, "as part of a U.S. government inter-agency process, the U.S. 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. Back in March 2006, for instance, the U.S. Army issued a solicitation for a two-year contract "to allow any organization or entity to support IRMO [Iraq Reconstruction Management Office] (U.S. Embassy Baghdad) to deliver an effective capacity development program utilizing predominantly U.S. 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 U.S. would pay for programs to, among other things, enhance relationships between the Iraq Oil Ministry and… you guessed it… foreign firms.

Tom Engelhardt's introduction to the piece is pretty good too, taking a cynical look at the slow, slow progress of efforts to put a gas pipeline through the heartland of the evil Taliban. Denials that the war on terror is about oil are quite right in one respect - the never ending occupation of Afghanistan is about gas, not oil (putting all those crazy theories about the drug trade to one side of course).

…and speaking of oil, just when we were barely getting used to Big Oil and Iraq hitting the front pages of American newspapers in tandem, here comes Afghanistan! Who now remembers that delegation of Taliban officials, shepherded by Unocal ("We're an oil and gas company. We go where the oil and gas is…"), back in 1999, that made an all-expenses paid visit to the U.S. There was even that side trip to Mt. Rushmore, while the company (with U.S. encouragement) was negotiating a $1.9 billion pipeline that would bring Central Asian oil and natural gas through Afghanistan to Pakistan? Oh, and who was a special consultant to Unocal on the prospective deal? Zalmay Khalilzad, our present neocon ambassador to the U.N., George W. Bush's former viceroy of Kabul and then Baghdad, and a rumored future "Afghan" presidential candidate.

Those pipeline negotiations only broke down definitively in August 2001, one month before, well, you know… and, as Toronto's Globe and Mail columnist Lawrence Martin put it, "Washington was furious, leading to speculation it might take out the Taliban. After 9/11, the Taliban, with good reason, were removed -- and pipeline planning continued with the Karzai government. U.S. forces installed bases near Kandahar, where the pipeline was to run. A key motivation for the pipeline was to block a competing bid involving Iran, a charter member of the 'axis of evil.'"

Well, speak of the dead and not-quite-buried. It turns out that, in April, Turkmenistan, Afghanistan, Pakistan, and India (acronymically TAPI) signed a Gas Pipeline Framework Agreement to build a U.S.-backed $7.6 billion pipeline. It would, of course, bypass Iran and new energy giant Russia, carrying Turkmeni natural gas and oil to Pakistan and India. Construction would, theoretically, begin in 2010. Put the emphasis on "theoretically," because the pipeline is, once again, to run straight through Kandahar and so directly into the heartland of the Taliban insurgency.

Pepe Escobar of Asia Times caught the spirit of the moment perfectly: "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." Nonetheless, as in Iraq, American (and NATO) troops could one day be directly protecting (and dying for) the investments of Big Oil in a new version of the old imperial "Great Game" with a special modern emphasis on pipeline politics.

There has been a flurry of reportage on the revived pipeline plan in Canada, where -- bizarrely enough -- journalists and columnists actually worry about such ephemeral possibilities as Canadian troops spending the next half century protecting Turkmeni energy. If you happen to live in the U.S., though, you would really have no way of knowing about such developments, no less their backstory, unless you were wandering the foreign press online.