[Peace-discuss] Chris Floyd on Iraq Oil Production Sharing Agreements

[n.dahlheim at mchsi.com]

New Oil Law Means 
'Victory' In Iraq for Bush
By Chris Floyd
1-9-7
I. Surging Toward the Ultimate Prize
 
The reason that George W. Bush insists that "victory" is achievable in Iraq is not that he is deluded or 
isolated or ignorant or detached from reality or ill-advised. No, it's that his definition of "victory" is 
different from those bruited about in his own rhetoric and in the ever-earnest disquisitions of the 
chattering classes in print and online. For Bush, victory is indeed at hand. It could come at any moment 
now, could already have been achieved by the time you read this. And the driving force behind his 
planned "surge" of American troops is the need to preserve those fruits of victory that are now ripening 
in his hand.
 
At any time within the next few days, the Iraqi Council of Ministers is expected to approve a new 
"hydrocarbon law" essentially drawn up by the Bush administration and its UK lackey, the Independent 
on Sunday reported. The new bill will "radically redraw the Iraqi oil industry and throw open the doors 
to the third-largest oil reserves in the world," says the paper, whose reporters have seen a draft of the 
new law. "It would allow the first large-scale operation of foreign oil companies in the country since the 
industry was nationalized in 1972." If the government's parliamentary majority prevails, the law should 
take effect in March.
 
As the paper notes, the law will give Exxon Mobil, BP, Shell and other carbon cronies of the White House 
unprecedented sweetheart deals, allowing them to pump gargantuan profits from Iraq's nominally 
state-owned oilfields for decades to come. This law has been in the works since the very beginning of 
the invasion - indeed, since months before the invasion, when the Bush administration brought in 
Phillip Carroll, former CEO of both Shell and Fluor, the politically-wired oil servicing firm, to devise 
"contingency plans" for divvying up Iraq's oil after the attack. Once the deed was done, Carroll was 
made head of the American "advisory committee" overseeing the oil industry of the conquered land, as 
Joshua Holland of Alternet.com has chronicled in two remarkable reports on the backroom maneuvering 
over Iraq's oil: "<http://www.alternet.org/waroniraq/43045/>Bush's Petro-Cartel Almost Has Iraq's Oil 
and "The US Takeover of Iraqi Oil."
 
>From those earliest days until now, throughout all the twists and turns, the blood and chaos of the 
occupation, the Bush administration has kept its eye on this prize. The new law offers the barrelling 
buccaneers of the West a juicy set of production-sharing agreements (PSAs) that will maintain a fig leaf 
of Iraqi ownership of the nation's oil industry - while letting Bush's Big Oil buddies rake off up to 75 
percent of all oil profits for an indefinite period up front, until they decide that their "infrastructure 
investments" have been repaid. Even then, the agreements will give the Western oil majors an unheard-
of 20 percent of Iraq's oil profits - more than twice the average of standard PSAs, the Independent 
notes.
 
Of course, at the moment, the "security situation" - i.e., the living hell of death and suffering that 
Bush's "war of choice" has wrought in Iraq - prevents the Oil Barons from setting up shop in the looted 
fields. Hence Bush's overwhelming urge to "surge" despite the fierce opposition to his plans from 
Congress, the Pentagon and some members of his own party. Bush and his inner circle, including his 
chief adviser, old oilman Dick Cheney, believe that a bigger dose of blood and iron in Iraq will produce 
a sufficient level of stability to allow the oil majors to cash in the PSA chips that more than 3,000 
American soldiers have purchased for them with their lives.
 
The American "surge" will be blended into the new draconian effort announced over the weekend by 
Iraqi prime minister Nouri al-Maliki: an all-out war by the government's Shiite militia-riddled "security 
forces" on Sunni enclaves in Baghdad, as the Washington Post reports. American troops will "support" 
the "pacification effort" with what Maliki says calls "house-to-house" sweeps of Sunni areas. There is of 
course another phrase for this kind of operation: "ethnic cleansing."
 
The "surged" troops - mostly long-serving, overstrained units dragooned into extended duty - are to 
be thrown into this maelstrom of urban warfare and ethnic murder, temporarily taking sides with one 
faction in Iraq's hydra-headed, multi-sided civil war. As the conflict goes on - and it will go on and on - 
the Bush administration will continue to side with whatever faction promises to uphold the 
"hydrocarbon law" and those profitable PSAs. If "Al Qaeda in Iraq" vowed to open the nation's oil spigots 
for Exxon, Fluor and Halliburton, they would suddenly find themselves transformed from "terrorists" 
into "moderates" - as indeed has Maliki and his violent, sectarian Dawa Party, which once killed 
Americans in terrorist actions but are now hailed as freedom's champions.
 
So Bush will surge with Maliki and his ethnic cleansing for now. If the effort flames out in a disastrous 
crash that makes the situation worse - as it almost certainly will - Bush will simply back another horse. 
What he seeks in Iraq is not freedom or democracy but "stability" - a government of any shape or form 
that will deliver the goods. As the Independent wryly noted in its Sunday story, Dick Cheney himself 
revealed the true goal of the war back in 1999, in a speech he gave when he was still CEO of 
Halliburton. "Where is the oil going to come from" to slake the world's ever-growing thirst, asked 
Cheney, who then answered his own question: "The Middle East, with two-thirds of the world's oil and 
the lowest cost, is still where the prize ultimately lies."
 
And therein lies another hidden layer of the war. For Iraq not only has the world's second largest oil 
reserves; it also has the world's most easily retrievable oil. As the Independent succinctly notes: "The 
cost-per-barrel of extracting oil in Iraq is among the lowest in the world because the reserves are 
relatively close to the surface. This contrasts starkly with the expensive and risky lengths to which the 
oil industry must go to find new reserves elsewhere - witness the super-deep offshore drilling and 
cost-intensive techniques needed to extract oil form Canada's tar sands."
 
This is precisely what Cheney was getting at in his 1999 talk to the Institute of Petroleum. In a world of 
dwindling petroleum resources, those who control large reserves of cheaply-produced oil will reap 
unimaginable profits - and command the heights of the global economy. It's not just about profit, of 
course; control of such resources would offer tremendous strategic advantages to anyone who was 
interested in "full spectrum domination" of world affairs, which the Bush-Cheney faction and their 
outriders among the neo-cons and the "national greatness" fanatics have openly sought for years. With 
its twin engines of corporate greed and military empire, the war in Iraq is a marriage made in Valhalla.
 
II. The Win-Win Scenario
 
And this unholy union is what Bush is really talking about when he talks about "victory." This is the 
reason for so much of the drift and dithering and chaos and incompetence of the occupation: Bush and 
his cohorts don't really care what happens on the ground in Iraq - they care about what comes out of 
the ground. The end - profit and dominion - justifies any means. What happens to the human beings 
caught up in the war is of no ultimate importance; the game is worth any number of broken candles.
 
And in plain point of fact, the Bush-Cheney faction - and the elite interests they represent - has already 
won the war in Iraq. I've touched on this theme before elsewhere, but it is a reality of the war that is 
very often overlooked, and is worth examining again. This ultimate victory was clear as long ago as 
June 2004, when I first set down the original version of some of the updated observations below.
 
Put simply, the Bush Family and their allies and cronies represent the confluence of three long-
established power factions in the American elite: oil, arms and investments. These groups equate their 
own interests, their own wealth and privilege, with the interests of the nation - indeed, the world - as a 
whole. And they pursue these interests with every weapon at their command, including war, torture, 
deceit and corruption. Democracy means nothing to them - not even in their own country, as we saw in 
the 2000 election. Laws are just whips to keep the common herd in line; they don't apply to the elite, as 
Bush's own lawyers and minions have openly asserted in the memos, signing statements, court cases 
and presidential decrees asserting the "inherent power" of the "unitary executive" to override any law he 
pleases.
 
The Iraq war has been immensely profitable for these Bush-linked power factions (and their tributary 
industries, such as construction); billions of dollars in public money have already poured into their 
coffers. Halliburton has been catapulted from the edge of bankruptcy to the heights of no-bid, open-
ended, guaranteed profit. The Carlyle Group is gorging on war contracts. Individual Bush family 
members are making out like bandits from war-related investments, while dozens of Bush minions - 
like Richard Perle, James Woolsey, and Joe Allbaugh - have cashed in their insider chips for blood 
money.
 
The aftermath of the war promises equal if not greater riches. Even if the new Iraqi government 
maintains nominal state control of its oil industry, there are still untold billions to be made in PSAs for 
drilling, refining, distributing, servicing and securing oilfields and pipelines. Likewise, the new Iraqi 
military and police forces will require billions more in weapons, equipment and training, bought from 
the US arms industry - and from the fast-expanding "private security" industry, the politically hard-
wired mercenary forces that are the power elite's latest lucrative spin-off. And as with Saudi Arabia, oil 
money from the new Iraq will pump untold billions into American banks and investment houses.
 
But that's not all. For even in the worst-case scenario, if the Americans had to pull out tomorrow, 
abandoning everything - their bases, their contracts, their collaborators - the Bush power factions 
would still come out ahead. For not only has their already-incalculable wealth been vastly augmented 
(with any potential losses indemnified by US taxpayers), but their deeply-entrenched sway over 
American society has also increased by several magnitudes. No matter which party controls the 
government, the militarization of America is so far gone now it's impossible to imagine any major 
rollback in the gargantuan US war machine - 725 bases in 132 countries, annual military budgets 
topping $500 billion, a planned $1 trillion in new weapons systems already moving through the 
pipeline. Indeed, the Democratic "opposition" has promised to expand the military.
 
Nor will either party conceivably challenge the dominance of the energy behemoths - or stand against 
the American public's demand for cheap gas, big vehicles, and unlimited consumption of a vast 
disproportion of the world's oil. As for Wall Street - both parties have long been the eager courtesans of 
the investment elite, dispatching armies all over the world to protect their financial interests. The power 
factions whose influence has been so magnified by Bush's war will maintain their supremacy regardless 
of the electoral outcome.
 
[By the way, to think that all of this has happened because a small band of extremist ideologues - the 
neo-cons - somehow "hijacked" US foreign policy to push their radical dreams of "liberating" the Middle 
East by force and destroying Israel's enemies is absurd. The Bush power factions were already 
determined to pursue an aggressive foreign policy; they used the neo-cons and their bag of tricks - 
their inflated rhetoric, their conspiratorial zeal, their murky Middle East contacts, their ideology of brute 
force in the name of "higher" causes - as tools (and PR cover) to help bring about a long-planned war 
that had nothing to do with democracy or security or any coherent ideology whatsoever beyond the 
remorseless pursuit of wealth and power, the blind urge to be top dog.]
 
So Bush and his cohorts have won even if the surge fails and Iraq lapses into perpetual anarchy, or 
becomes an extremist religious state; they've won even if the whole region goes up in flames, and 
terrorism flares to unprecedented heights - because this will just mean more war-profiteering, more 
fear-profiteering. And yes, they've won even though they've lost their Congressional majority and could 
well lose the presidency in 2008, because war and fear will continue to fill their coffers, buying them 
continuing influence and power as they bide their time through another interregnum of a Democratic 
"centrist" - who will, at best, only nibble at the edges of the militarist state - until they are back in the 
saddle again. The only way they can lose the Iraq War is if they are actually arrested and imprisoned for 
their war crimes. And we all know that's not going to happen.
 
So Bush's confident strut, his incessant upbeat pronouncements about the war, his complacent smirks, 
his callous indifference to the unspeakable horror he has unleashed in Iraq - these are not the 
hallmarks of self-delusion, or willful ignorance, or a disassociation from reality. He and his accomplices 
know full well what the reality is - and they like it.
 
 
Chris Floyd is an American journalist. His weekly political column, "Global Eye," ran in the Moscow 
Times from 1996 to 2006. His work has appeared in print and online in venues all over the world, 
including The Nation, Counterpunch, Columbia Journalism Review, the Christian Science Monitor, Il 
Manifesto, the Bergen Record and many others. His story on Pentagon plans to foment terrorism won a 
Project Censored award in 2003. He is the author of Empire Burlesque: High Crimes and Low Comedy in 
the Bush Imperium, and is co-founder and editor of the <http://www.chris-floyd.com/>"Empire 
Burlesque" political blog.