U.S. oil companies have been frozen out of the first major round of bidding for exploratory oil-field development contracts in (non-Kurdish) Iraq:
Not a single U.S. company secured a deal in the auction of contracts that will shape the Iraqi oil industry for the next couple of decades. Two of the most lucrative of the multi-billion-dollar oil contracts went to two countries which bitterly opposed the U.S. invasion — Russia and China — while even Total Oil of France, which led the charge to deny international approval for the war at the U.N. Security Council in 2003, won a bigger stake than the Americans in the most recent auction. “[The distribution of oil contracts] certainly answers the theory that the war was for the benefit of big U.S. oil interests,” says Alex Munton, Middle East oil analyst for the energy consultancy Wood Mackenzie, whose clients include major U.S. companies. “That has not been demonstrated by what has happened this week.”
I remember in the feverish late summer of 2002 a variety of think-tanky and media people speculated about what it would take to secure Russia’s vote for the invasion at the Security Council. One variety of conjecture: the U.S. would need to guarantee a contract between Saddam and Moscow to develop the huge West Qurna oil field. A neoconservative friend of mine then working with me at a magazine sniffed: That would be untoward! Yes, better to invade and occupy Iraq without the Security Council, “purity” of intentions protected, and then deny forever more that oil ever has anything to do with why we care about the Middle East, you conspiracy theorist.
Anyway. I’d add that whatever people’s “true” intentions about wanting to invade Iraq — my own understanding: it was about a demonstration of American power, however misguided and crude, leavened with some theological messianism about an unthought-out concept passing itself off as “freedom” in some corners — the fact that the U.S. oil companies didn’t get these contracts doesn’t prove the Iraq war wasn’t about oil. A perfectly commensurate explanation would be that the U.S. simply doesn’t have the power to guarantee the Iraqis hand over the contracts to American oil companies. I don’t think the war was about oil, but still. This has been your cheeky logic lesson of the snowy morning.
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I have always thought it was obvious that the invasion was ‘about oil’. Just not in the direct sense of actually taking oil out of the ground in Iraq and shipping it to the US.
No, it was about securing petroleum supplies for the US, Europe and Japan. The clear intent was to keep a strong US military presence in the heart of the oilfields, in order to bring pressure on any of the local exporters who tried to use oil as an economic weapon against the west.
The whole point of the exercise was to secure oil supplies to western economies at a time when Chinese and Indian demand was increasing and a few percentage points of daily export quotas represented powerful political and economic leverage.
And I don’t know how oilfield development contracts actually work, but I would be very surprised if there wasn’t some level of ’spite factor’ involved here. As long as they received the money they expected, to whatever extent they could funnel those contracts to countries that DIDN’T invade and destroy their country would satisfy a certain nationalism on the part of the Iraqis…
mikey
Yeah, ‘about oil’ needs to be expanded from the narrow interest of U.S. owned oil companies to the oil market globally. And the oil we’re talking about isn’t just the stuff under Iraq, but the oil in other nearby Persian Gulf states.
The only reason we give a damn about this region, and the only reason their terrorists give a damn about us, is our petroleum relationship. It’s not just this one war–almost the entire beef between America and Islam has oil at it’s root. We propped up the various dictators in the region because we wanted to keep our enemies from getting the stuff.
That’s what “blood for oil” really means. It’s not that we looked over there and saw a juicy pile of oil and dollar signs appeared in our our eyes as blood covered our hands. It’s that each and every day we choose to go along with inertia and keep consuming oil the way we are is a day that makes future wars more likely.
Bush bought Russia, China and France’s UN vote by giving up Iraq’s oil? We fought this oil war and gave up the oil? Is Iran sending troops over the border to make sure Russia, China and France don’t end up on its doorstep?
Saddam made the mistake of letting us build up our forces Iran must have learned better.
No Things, Bush didn’t buy the votes by giving up Iraq’s oil.
Saddam signed a contract with Russia that allowed the Russian’s rights to Iraqi oil and there was speculation that Russia would back Saddam so they would get to keep the oil in the contract.
Further speculation was that Bush had to promise not to void the contract.It wasn’t as much that he was giving away the oil as he would be promising not to take it back.
1. I have to ask if the US gets any public diplomacy points for not winning this. In other words, is it deliberate? I think the answer is no.
2. I also have to wonder whether the outcome would have been different if a Republican were in the White House.
3. To be cynical, it would be interesting if it turned out that US oil companies had deals with the winners to participate. It would at least simplify our conspiracy theories.
I suspect that George W Bush was a liberal idealist who meant what he said about democracy. He just bungled it.
Thanks for the information but China and France also got oil contracts when no American oil company gets a contract? Bush was an oil man this is not the kind of thing he would forget.
I tend to think that our oil companies didn’t bid higher because we don’t need the oil as much and don’t need to gamble on being able to extract it at a reasonable cost in an area that’s not all that likely to be safe.
Ok but Iran is invading an Iraqi oil field right now coincidence?
World oil prices could get real interesting monday.
No. It’s the Iranian government acting like the Iranian government. Any time that they have problems and have to act in a way that they don’t want to announce to the world, they stage some kind of high-profile diversion.
If you look close, you might learn that the Iranians were forced to admit that they tortured and murdered some of the imprisoned protesters.
They arrested some of the prison guards. Just some guys on the bottom, but they’ve been trying to go real quiet about it.
I’m so happy to learn that the U.S. taxpayers are once again in the ditch, as the Iraq invasion did not secure expensive oil for U.S. corps. Oh, trash that sentence. It’s the Chinese who are paying for the U.S. war that got them Chinese oil. Seems only fair.
I’ve told friends for years that the epitaph for the Iraq war, if it ever ends, will be:
Only George W. Bush could go to war for oil in Iraq…and not get any.
Zing! Ouch!
Blame it on that “silver foot in his mouth.” Wonder what Cheney will have to say (well, not really)
from what ive read, he wasnt a very good or succesful oil man
Dude! Saddam tried to kill W’s Dad. Try to keep up, please.
Also, peeance and freeance. But mostly his Dad. And Saddam’s gun, also.
And if Obama makes any comments, “they” will say, There you go again, blaming everything on Bush.” Well, Yes.
A story one could tell about any number of tyrants, eh?
Everywhere and all the time. Except when they don’t arrest anyone at all.
Probably didn’t make more than a million bucks at it.
After what the U.S. did to Iraq – destroyed it – they don’t deserve any contracts for Iraq’s oil. That’s one humiliation too many.
If you’ve watched this much, you saw the US oil interests getting outpositioned once Bush decided to make the “democracy” centerpiece. I’m guessing they don’t truly love him all that much.
Where they were originally going to go in, put in a US puppet gov and did make sure that Chalabi was oil minister to seal the deal, once Bush went with his “spreading democracy” theme to try to ameliorate the lack of any WMDs, things went south for the “US”(multinational) oil interests. I think Hunt did go in early and get a deal, but a more minor one.
What happened was that Iraqi politicos outmaneuvered Condi RIce on the Iraqi “oil law” that she kept trying to push half of. Over and over she tried to get them to go ahead and pass the part that would have given Chalabi the right to start entering into participation agreements with big margins to the oil companies asap. But the Iraqi’s tied that half to legislation that involved how the proceeds were going to be split – effectively slowing the whole thing down to the point that the originally conceived fast handoff to US/multinational oil interests never got off the ground. Coupled with a hard schedule for us troops to withdraw (which means that megaoil companies couldn’t rely on being able to use opm and opb- other people’s money and other people’s blood) and suddenly the risk reward wasn’t nearly what it was when some payments to Chalbi took care of everything.
The US, though, is still able to skate by without admitting it tortured and mudered. But it’s nice to know we’re keeping the Afghan war around as a distraction if and when things like Haditah and civilian deaths in Pakistan and sliced and diced genitals etc. ever got someone in gov to actually feel like they had to distract attention. I guess it’s worth knowing that the US population is more tolerant of those kind of practices by their government than the Iranian population. Not reassuring, but worth knowing.
I don’t think so, Mary. The Iranians tortured and murdered children of influential, politically connected Iranians.
We’ll be a lot less tolerant when it’s our own children tortured and killed by our own government.
This could easily expand to a larger war we still have troops in Iraq some solder gets nervous starts shooting both sides panic call in reinforcements I’m sure both Iran and Iraq would love $100 a barrel oil.
Not to worry. We’ll get our piece when Russia shuts the fuck up during Israel proxy bombing the shit outa Iran for us. Lotta oil there. Don’t know what China gets from that, though, other than intererst on our debt to run all these oil wars.
“Untoward” he sniffed, adjusting his monogrammed hanky and looking pensively at his manicured fingernails.
Israel bombs oil prices go past $100 a barrel.
Oil at $100 per barrel will benefit Russia a lot more than it will the US.
Thanks for the elementary logic lesson, Spencer; Mr. Munton clearly needs it.
Fwiw, I always thought that actual oil folk at best looked askance at the notion of just “taking the oil” compared to other ways of getting at it. This is what you get for letting deciders be people who wear hats well, or have as their major skill an ability to gum up the works systematically and thoroughly.
Combine this with our recent State visits to Peking and Moscow and you realize that it is all about control not the immediate possession of any resources themselves, after all, there is more profit in distribution than ownership.
Follow the money (or lack of what with our sovereign dept to China and Russia.)
The Grand Game continues with those at the top pulling the strings and deciding where the money goes.
I guess that depends on perspective. From mine it looks like “our” children have done a lot of dying and being maimed in Iraq and Afghanistan. In addition to the “their” children things we’ve done – from KSM’s/Siddiqui’s children to Haditha to drone bombings of babies to hundreds of thousands or more made into refugee, orphaned, maimed, etc.
But when the new runs pictures of murdered Iranians but not of the dead toddlers at Haditha – and when the protestors in Iran manage to escape being called “illegal enemy combatants” despite their “lack of uniform” I can see how the perspective is different.
It doesn’t matter if our government is killing (and making killers of) our kids every day – the way it is in Afghanistan and Iraq. What matters is what the non-stop media message becomes. So far, the media here chooses to disassociate our government from its role in the deaths of our children. imo – fwiw.
It is difficult for Americans to understand the extent to which the Iraqis hate us. They act like we invaded and wrecked their country, destroyed their homes and meager positions all while killing tens of thousands of their friends, neighbors and family. It is doubtful that if the shoe was on the other foot we would feel any different
Jon Walker is upstairs!
More Money To Community Health Care Centers And An Important Improvement To Cantwell’s Basic Health Program
And as Bush often said, why can’t the Iraqis express their gratitude to Americans more gratefully?
How does this big zero for our oil companies square with Cheney’s Energy Task Force and all those secret maps that divided up the Iraqi oilfields?
Glad i read the comments first.
That’s my feeling exactly eCahn.
“Our” oil companies? How much oil company stock _do_ you own? Multi-national companies owe allegiance to no country.
When both Russia and China place within Iraq a few super military bases each and take over some Iraqi air space control as USAF now currently lords over that will be an interesting set of events.Chances of that? Anyone?
China and India are both on fossil fuel usage expansion up curves that just ten years ago were not so viewable.
The American $$ as trading medium for ME oil is not where it was ten years ago and likely may be set aside over next five years as oil trading medium.
China is the deep pockets lender to WashingtonDC these days so if the backroom agreements have been made for China’s growing oil needs and these Iraqi oil field deals reflect this being so perhaps not so surprizing?
We know the Pentagon has put down a big footprint in Iraq and appears to be doing the same in Afghanistan. Pakistan may not escape Big Foot Americanism with plans afoot for a massive American Embassy going into Islamabad. Strange it is China thus far has not voiced greater concern over American military going deep into South Central Asia. Or has it?
Oil may have not been the only reason for March 2003 Shock and Awe Iraq Attack but we know Iraqs nationalized oil fields are no longer. Doubtful if Saddam or his offspring would have headed in this direction left unmolested or delivered out of this world by WashingtonDC attacking and putting in a long run occupation.
Iraq is a social,political and economic wreck six plus years after WashingtonDC came acalling with cruise missiles. It likely will be a miracle of sorts if Iraq does not end up where it was with Saddam again.
Militaristic strongman ruler. Ruthless repression practices. The oil fields get nationalized once again.
The oil will be pumped out of Iraq and once in the super oil tankers floating about the oceans who knows who may be trading it up?
It perhaps was never only about the oil but it sure as hell was never not about the oil.
Your opinion is almost always worth quite a lot to me.
Thank you for hosting the book and discussion earlier. Far and away the best thing on FDL today.
He was a drilling promoter, which is basically a fly-by-night job: get people to put up the money to drill wells, promising them that if the wells come in and if they produce, the
markspeople who put up the money will get rich. (The promoter is frequently the only one who makes any money on the deal. And Shrub wasn’t even very good at that. His father actually was an oilman for some years, and while he was (officially) running his company it was making money.)I seem to recall Paul Bremer’s outrageoulsy generous terms that were granted to US ol firms for rights to Iraqi oil. Aside from the fact that he had absolutely no standing to make those dictates, it seems now the US policy planners have once again learnt that even the best laid plans often go astray.
Buy some yourself, then you’ll get to vote in their board elections.
Have you seen this?
Torture claims by British resident are given credence by American judge
A recently declassified legal opinion from a US district judge reinforces Binyam Mohamed’s claim that he was tortured
Link.
To expand on my earlier remark: Neither does Cheney.
HAH!
Spencer, way to go . . . I was WONDERING when the struggles for oil, gas and the distribution routes would get covered in USA.
I’ve enjoyed reading foreign sources on this matter for years, but delighted to see ya bringing it forth in our homeland!
All the Bushie and Corporate America efforts to control gas, oil and distribution routes are failing.
And in the meantime, look at what we’ve ruined in lives, countries and destroyed here at home while pumping up this failed foreign effort while we continue to destroy the homefront in so many ways.
THANK YOU SPENCER FOR THIS ONE!
I’d buy shares in any stocks containing Cheney.
Hoss, we now cross the turf of what’s at hand and what else is out there.
Beyond this post.
Nicely put, and well done, bout the big pictuure, though.
I’d spend much time chatting with you about this, when it’s appropriate . . .
*G*
You kiddin me?
What part of the contractor profiteering enablement don’t you get that was legalized?
Sigh.
I’m not not one to cling to . . .
Ok so HUSH my mouth.
Yes to Ecahn, and yes to you.
Can I get some more Yorkshire and another Pita Rita here?
*G*
You hear Iran invaded Iraqi oil turf lately?
Whatcha think?
That’s great history and I agree with ya.
But it’s not current . . .
Que?
The minute Isreal goes proxy bombing, the genie is let loose out of the bottle.
I ferverntly disagree with you that this will ever happen.
Cus if if does, we all die.
You want that?
Dude, there IS no oil, the world goes bankrupt in a month.
Please.
This dragon tells it fully.
Dig it, or fail.
Teddy I’m sure you know about the divisions that go back to post WW1.
Cuz oil was in the pic then.
And I’m with ya.
So what, the angst and anger don’ change . . . got another point of relevance?
“the fact that the U.S. oil companies didn’t get these contracts doesn’t prove the Iraq war wasn’t about oil. A perfectly commensurate explanation would be that the U.S. simply doesn’t have the power to guarantee the Iraqis hand over the contracts to American oil companies.”
Exactly right.
You’ll recall the original plan was to install Ahmed Chalibi as the interim ruler of Iraq, with Bush administration officials talking vaguely about a timely of “years” before Iraq might become self governing. The fact Chalibi had no constituency in the country (not surprising, since he hadn’t live there for about 20 years) and the unexpected virulence of the insurgency forced the Bush administration’s hand and resulted in them having to take on Iraqi partners much more quickly than expected -first the sham (and hilariously misnamed) “Iraq Governing Council” then, when it became apparent this panel of handpicked quislings had almost as little credibility as Chalibi, by sponsoring actual elections.
Turns out Iraqi politicians with a popular mandate were far less sympathetic to American interests than an American installed puppet.
EXXONMOBILChevronTexacoBPShell told said they’d found vast quantities of untapped oil in Iraq by remote sensing technology, and if the French, the Russians, and the Chinese got it, it would be a crime. Yeah Dick’s big “energy” meeting was to divy it up. So Dick and Don and Dubya agreed to invade. The woosys found out the hard way that there’s no such thing as soft conquest, so they lost. Iraq won, and they went right back to the French, Russian and Chinese high bidders of yore.
Up your nose George W. and what are you gonna say at the Pearly Gates when asked why you sacrificed thousands of Americans maimed and killed for EXXONMOBILChevronTexacoBPShell’s greed? I hope you live long enough to think up a better answer than the BS you fed us those years. Remember they say God (and in this case Saint Peter acting as his agent) can read your mind. I guess that bags and tags it. See you in Hell.
Hey, my Dad had the energy task force meetings and put this thing together, went over to the CIA to saute the intel, and kept his part of the bargain. We Cheneys can’t help it if bit US oil companies are a bunch of pussies!
Bush got what he wanted, to kill a bunch of Islamic people for their religion. It was a success for him.
We are still operating on the Doctrine of Discovery, Iraq is only a victim of it.
Oh really? Have you looked into the drug war?
They also very conveniently ignore the drug war.
Why does everyone assume it was oil? Maybe it is narcotics that they were really after, there is lots of money in that. I think we are just the planet’s biggest, baddest drug lords and there is NO honor or glory in that.
In fact, it could be a real vote killer at the ballot box if the American people ever found out which of our renowned lawmakers are doing it, but media covers it up. Why? To protect the guilty drug dealers?
Or to keep up their own connections to a private supply chain? Yes, they can be bought.
Maybe it wasn’t about getting oil, maybe it was about dumping uranium.
I’d say it was a big loss of face.
the pirates of Somalia were in the same place we are in they invade your boat for Ransom. the difference is they share with their villages trickle down. us i don’t’ know where the booty goes but we the people don’t’ get any
First of all the Iran/Iraq border where this oil well is located has been unsettled for centuries. Secondly, it is not even a functioning oil well. Lastly, I would be very wary of any US mainstream media reports relating to Iran. Most, it not all, attempt to paint Iran as an aggressive nation that it is not. For all we know this could be the CIA planting the Iranian flag on Iraqi soil. All I’m saying is take all Iran news with a heavy, heavy grain of salt.
And in a million years Israel will not bomb Iran. Their current propaganda campaign has a lot more to do with economic security as opposed to national security.
No US companies? Do a little more research.
“They cover Kirkuk field (Shell), Rumaila (BP), Al-Zubair (ExxonMobil), West Qurna Phase I (Chevron and Total), Maysan province development (Shell and BHP Billiton) and the Subba and Luhais fields (Anadarko, Vitol and the UAE’s Dome), according to a previous media report.”
The US companies are waiting for the election and the “oil law” to be passed so they can get much, much better deals. The war was about oil, but also about the unlikely bed fellows of Saudi Arabia, Israel, and Kuwait, who either felt threatened by Saddam or highly slighted. Plus we needed a base of operations since Saudi Arabia wanted us out. Many, many pieces in the puzzle, but no one giving their power point presentations would acknowledge that Iran might be helped the most, especially with a Shiite government in Baghdad. So now, according to our Israel-first neocon leaders, we have to take out Iran, but where is the money for the project?
The semi-privatised wars themselves have proven to be so insanely profitable for corporate America that they will be judged very worthwhile even without any lucrative oil contracts.
Yes, really. I’ve looked into the drug war and the drug was has looked back into me. And yes. Really.
To clarify, US oil companies have already made off like bandits (or conquering heroes?) in Iraq. It’s important to note that US oil majors aren’t the leaders in pure pure exploration, and focus on production of existing fields.
As I understand it, the Chinese and Russian bid successes are speculative exploration tracks – not an area in which the US majors focus much money or attention. They look for the stuff.. we just take it when they find it.