The plunder of Iraq’s oil

[Hannah Bell]

The awarding of development rights over the huge West Qurna oilfield in southern Iraq to Exxon-Mobil and Royal Dutch Shell last Thursday once again underscores the criminal character of the continuing US-led occupation. As the direct result of the Iraq war, major American and other transnational energy conglomerates are now gaining control over some the largest oilfields in the world.

...Before the US invasion in 2003, rights over West Qurna had been awarded by the Baathist regime of Saddam Hussein to the Russian oil firm, Lukoil. The pro-US puppet regime in Baghdad has torn up all pre-war contracts.

Exxon-Mobil is the first US-based oil giant to benefit... As well as the Iraqi government compensating the companies for the cost of upgrading the field—which may run as high as $50 billion-—they will be paid $1.90 for each barrel extracted, or some $1.5 billion per year. Exxon-Mobil holds an 80 percent stake and Shell the remaining 20 percent.

The contract is only the second signed by the Baghdad regime with foreign energy companies. Last Tuesday, the Iraqi government concluded a deal with British Petroleum (BP) and China National Petroleum Corp (CNPC), giving them development rights to the massive Rumaila field and its reserves of 17 billion barrels. BP holds a 38 percent stake and CNPC, a 37 percent share. The plan is to boost production from around 1 million barrels per day to 2.85 million barrels, generating profits of over $2 billion per year...

Further deals are in the process of being finalised. A consortium made up of the Italian company Eni, US-based Occidental and South Korea’s Kogas has signed a tentative agreement for the Zubair oilfield with reserves of 4 billion barrels. Eni, Japanese giant Nippon Oil and Spanish firm Repsol are bidding for a field in Nasiriyah which has similar-sized reserves. In northern Iraq, Royal Dutch Shell is negotiating a contract to develop untapped areas of the major Kirkuk oilfield, which is thought to have as much as 10 billion barrels in reserves despite being in production since 1934.

...The US failed to achieve its wider regional objectives after the first Gulf War in 1990-91. The Hussein regime remained in place and despite continued UN sanctions was signing contracts with companies such as French oil giant Total and Lukoil. From the late 1990s on, Russia and the European powers were pressing for the lifting of sanctions to allow these companies to reap the benefits. War became the only means of preventing US corporate interests from being cut out.

American energy conglomerates were not passive bystanders. High-level representatives of Exxon-Mobil, Chevron, Conoco-Phillips, BP America and Shell took part in talks in early 2001 with the Bush administration’s “Energy Task Force” headed by Vice President Dick Cheney. One document prepared for the discussions included a detailed map of Iraq’s oil fields, terminals and pipelines and a list of the non-US foreign companies that were preparing to move in. A May 2001 report by the task force bluntly stated the US aim: “The Gulf will be the primary focus of US international energy policy.”

...While US corporations are not the sole beneficiaries of the contracts, there is no question who has the final say over Iraq’s oil. With huge military bases in the country and a Baghdad regime tied to Washington, the US is positioned to dictate terms to its European and Asian rivals and, amid rising great powers tensions, to wield the threat of cutting off oil supplies-—a longstanding tenet of American strategic policy.

http://www.wsws.org/articles/2009/nov2009/pers-n11.shtml