[Dryerase] Taking Back Iraq's Oil, November Public i

[SARAH BOYER]

Taking Back Iraq's Oil

by Jeff Sowers

Oil may not be the only reason the U.S. government is rushing into war with 
Iraq, but it is certainly one of the main reasons. Domestic politics, arms 
industry sales, and other factors all play a role. But for the money-hungry 
oil corporations, like Exxon-Mobile, Shell, and BP, it is oil that glitters 
like a mountain of diamonds in the Iraqi desert.

Crude oil is the world's most actively traded commodity, and when it comes 
to oil, Iraq has lots of it. With proven reserves of 112-bil bbl (barrels of 
oil) and probable reserves of 214-bil bbl, Iraq is second only to Saudi 
Arabia in crude oil reserves. Industry experts believe that Iraq's true 
resource potential may be far higher, however, as years of war and sanctions 
have severely restricted exploration and development. At current prices of 
about $27 a barrel, this comes out to be a prize worth between $3 trillion 
and $8.1 trillion. No wonder a post WWII, U.S. State Department assessment 
called the gulf oil resources “a stupendous source of strategic power, and 
one of the greatest material prizes in world history ... probably the 
richest economic prize in the world in the field of foreign investment.”

Buying Security Council Votes with Oil

The central role that oil is playing in this crisis was evident in recent 
U.S. efforts to get the support of Russia and France, who have been 
resisting U.S. pressure to authorize the use of force against Iraq before 
inspectors are allowed to return. Their backing has been crucial because 
they are among the five Security Council members with the power to veto a 
U.N. Security Council resolution authorizing force.
Why would Russia and France be so resistant to using force against Saddam 
Hussein? It is because both have a large stake in Iraqi oil and have already 
invested heavily in it.

On September 1st, the headline of a Washington Post article read 
“Russian-Iraqi Oil Ties Worry U.S.: Moscow's Support for an Attack on 
Hussein May Depend on Economic Assurances.” The article talked about the 
“depth” of economic ties between Russia and Iraq, which have been long-time 
allies, ever since the emergence of the Ba’th party and Saddam Hussein in 
the late 60’s. Major Russian oil corporations such as LUKoil and 
Zarubezhneft have made major investments in Iraq and have been seeking to 
position themselves as leading exporters of Iraqi oil when economic 
sanctions are lifted. LUKoil currently owns 68% in a consortium that has 
invested a reported $6 billion in developing the 20-bill bbl West Kurna oil 
field; Iraq also owes Russia at least $7 billion in debt from previous 
decades.

In a September 9th New York Times article a senior Bush official said the 
arguments presented to the Russians to get their vote for war against Iraq 
had been “economic,” and that the U.S. “did not rule out the possibility of 
negotiating explicit guarantees for Russian interests, mostly oil-related.” 
The official also stated that “they're a lot more likely to get their debts 
paid off” by supporting the U.S. policy.

France also has major investments in Iraqi oil. It, more than any other 
western nation, has cultivated a relationship with Iraq. France was the 
largest supplier of arms to Iraq during the Iran-Iraq war. In the 1970’s 
they helped Iraq build a nuclear power plant that was subsequently bombed by 
Israel in 1981. The French oil corporation TotalElfFina, the fifth largest 
oil corporation in the world, has a major presence in Iraq. Among other 
deals, TotalElfFina has negotiated with Iraq on development rights for the 
fabulously rich Majnoon oil field, the largest in Iraq.

A top French official candidly laid it out in a September 15th article in 
the New York Times. He said, “In a sense we're trapped. Ultimately, we will 
want to re-engage in Iraq. We built a strategic relationship there. We have 
a market. We want the oil and we want to be in the game of rebuilding the 
country. If there were a new regime and we have not been with the Americans, 
where will we be?”

Actually, what is probably worrying the Russians and the French more than 
what might happen if they don’t go along is what might happen if they do. 
Will they get their “fair share” of Iraq’s oil even if they give their 
support, or will they be left to scramble after the crumbs left behind after 
U.S. and British oil corporations are allowed to sweep in and gobble up the 
juiciest and most lucrative fields?
Recent statements made by the U.S.-backed opposition group the Iraqi 
National Congress (INC) would certainly give Russia and France reason to 
pause. INC officials have made it clear that “they will not be bound by any 
of the deals” Iraq has made with Russia, France or other nations. Ahmed 
Chalabi, the INC leader, went even further, saying he supports the formation 
of a U.S.-led consortium to develop Iraq's oil fields. "American companies 
will have a big shot at Iraqi oil," he said.

Exxon and Mobil Had it First

But how did it come to be that Russia and France got the dominant position 
in Iraqi oil, a position they are now anxious about losing to the British 
and Americans? Not so long ago, before the era of Saddam and the Ba’th 
party, it wasn’t LUKoil and TotalElfFina that had the dominant position in 
Iraqi oil, but Exxon-Mobil, BP and Shell. From their perspective, îregime 
change” in Iraq would give them the opportunity to reclaim what was “theirs” 
to begin with.

Following the collapse of the Ottoman Empire after WWI, western governments 
and oil corporations descended on the Persian Gulf like a pack of hungry 
hyenas, growling and nipping at each other as they fought for the greatest 
share. Britain was the main military power in the region, and pieced 
together Iraq from remnants of the Ottoman Empire. They placed King Faisal, 
a British puppet, on the throne, and proceeded to block Exxon and Mobil's 
exploration efforts in Iraq while giving full support to those of British 
Petroleum and Royal Dutch Shell. This led to intense diplomatic pressure by 
the Americans. A British foreign office official complained that "Washington 
officials began to think, talk and write like Exxon officials.” Finally, in 
1928, as part of an overall deal to divide the region’s oil between the 
world’s great powers, known as the “Red Line Agreement,” Exxon and Mobil 
were granted a 25% share in the Iraq Petroleum Company.

Production began in 1934. While the oil corporations were satisfied with the 
arrangement, many Iraqi’s were not. To insure their control, Britain 
maintained bases in the area and routinely bombed and strafed rebellious 
Kurdish and Shia tribesmen. When the Iraqi leadership rebelled in 1940, the 
British were forced to send in reinforcements leading to armed conflict with 
Iraqi forces in 1941. The conflict was short lived, the rebellious Iraqi 
leadership fled the country, and Britain reestablished its authority.

Iraq Slips Through Britain’s Fingers

In 1958, the British again lost control when an Iraqi revolution led by an 
army faction known as the Free Officers, under the leadership of Abd 
al-Karim Qasim, overthrew and executed the British puppet King Faisal II. 
This time, however, reestablishing British control would not be so easy. The 
Cold War was in full swing. Qasim soon established diplomatic relations 
between Iraq and Moscow, signed an extensive Iraqi-Soviet economic 
agreement, and the Soviets began supplying arms to Iraq. At the same time, 
Qasim was cautious in dealing with the western oil corporations, and only 
sought increased revenues rather than complete nationalization. Qasim also 
sought to keep his distance from the Soviets, first embracing and then later 
repressing the Iraqi Communist Party (ICP).

Internal division within the army soon led to Qasim’s overthrow and a series 
of internal coups. In 1968, the Iraqi Ba’th party, under the leadership of 
Ahmad Hasan al Bakr and Saddam Hussein, emerged as the dominant faction. 
Some claim that the CIA played a role in the successful 1968 coup that 
brought the Ba’th party to power. This may well have been, but as events 
turned out, it would have been a gamble that didn’t pay off. The Ba’th 
turned away from the U.S. and sought improved relations with the ICP. In 
April of 1972, Iraq signed a 15-year treaty of Friendship and Cooperation 
with the Soviet Union and agreed to cooperate in political, economic, and 
military affairs. The Soviets agreed to supply Iraq with arms. Bakir also 
nationalized Iraq’s entire oil industry, including Exxon and Mobil’s 25% 
share in the Iraq Petroleum Company (a share worth today upwards of a 
trillion dollars). The Soviet Union, and later France, among others, 
provided Iraq critical technical skill and capitol needed to exploit the oil 
fields. And thus it happened that U.S., British, and Dutch oil corporations 
lost their hold on Iraq.

This is not to say that Iraq became part of the Soviet sphere. While the 
Ba’th turned to the Soviets for protection from British and U.S. 
imperialists, they maintained their independence, and did not allow the 
soviets to penetrate their security apparatus to the point of allowing them 
to ‘reach’ the inner leadership. In the mid-seventies, as had happened in 
the mid-sixties under Quasim, when it was felt the communists were getting 
too powerful, the Ba’th cracked down on the ICP and moved to distance 
themselves from the Soviets. During the Cold War period the Iraqi 
government, like other revolutionary governments at the time, was able to 
find a space to exist independently within the balance of power between the 
U.S. and the Soviet empires.

Strange Bedfellows

Neither should the temporary strategic alliance between the U.S. and Iraq 
during the Iran-Iraq war be overstated, as some progressives have mistakenly 
done. Iraq under Saddam was never a “client state” of the U.S., though the 
U.S. did provide crucial military and political support for Iraq during the 
latter stages of the war (a time when Iraq was repeatedly using chemical 
weapons against Iran, with U.S. knowledge and support).

Both Iraq and the U.S. found themselves in conflict with Iran after the 1979 
Islamic revolution that brought Ayatollah Khomeini to power, but for 
completely different reasons. The Ayatollah Khomeini promoted the spread of 
Islamic revolution across the Middle East, including revolution in Iraq to 
overthrow Saddam and the Ba’th party, who were secular nationalists that 
tended toward authoritarian socialism. The U.S., on the other hand, had just 
lost another oil rich nation to a revolution, and was intent on not letting 
the revolutionary fever spread.

The Prize and the Price

The collapse of the Soviet Union in 1990 and end of the Cold War radically 
changed the global power arrangement. No longer can nations like Iraq play 
the superpowers off one another to maintain independence. So after more than 
30 years, with no one to stop them, the U.S. and Britain, with Exxon-Mobil, 
BP, Shell, UNOCAL, and Chevron waiting in the wings, are moving in to 
reclaim their lost Iraqi prize. Impotent militarily, all France and Russia 
will likely do is sell their Security Council vote for the highest price 
they can get, which probably won’t be much.

The highest price of all, of course, is being paid by Iraqi children, 
innocent civilians, and young American troops. It is they, and not the oil 
company stockholders, executives, and political elites who die and suffer as 
the result of continued sanctions and the bloody horror that is war.

Jeff Sowers and his family recently moved to Urbana from Olympia, Washington 
for his wife’s graduate work in African Studies. He is currently working as 
a substitute public school teacher. He graduated from the University of 
Washington with a degree in Physics in 1988 and then spent six months living 
in India, an experience that he says made the rest of the world much more 
real and human. He then came across the work of Noam Chomsky, which 
completely transformed his understanding of the world and the U.S. 
government. When the first Gulf war took place in 1991, he became very 
involved with the anti-war movement in Seattle. Since then he has been 
involved in a variety of issues and projects, including Pastors for Peace, 
the Green Party, sweatshop issues, and the promotion of Direct Democracy. He 
has also traveled to Haiti, Cuba, Mexico, and Tanzania. He is currently a 
working member at the Common Ground Food co-op and an active member of 
AWARE.

For use by dryerase-members. Please send an email to 
imc-print at urbana.indymedia.org when reprinted.

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