[Peace-discuss] Dahr Jamail: Western oil firms remain as US claims to leave Iraq
Stuart Levy
salevy at illinois.edu
Thu Jan 12 11:38:54 CST 2012
(from Al Jazeera, via United for Peace and Justice)
"Prior to the 2003 invasion and occupation of Iraq, US and other western
oil companies were all but completely shut out of Iraq's oil market,"
oil industry analyst Antonia Juhasz told Al Jazeera. "But thanks to the
invasion and occupation, the companies are now back inside Iraq and
producing oil there for the first time since being forced out of the
country in 1973.
[...]
It is widely understood that Iraq will require at least $200bn in
physical and human investments to bring its production capacity up to
12m bpd (million barrels/day), from its current production levels [about
3m bpd].
Juhasz explained that ExxonMobil, BP and Shell were among the oil
companies that "played the most aggressive roles in lobbying their
governments to ensure that the invasion would result in an Iraq open to
foreign oil companies."
[See the graphic below for which companies have drilling contracts in
which mega-oilfields.]
-------- Original Message --------
Subject: [ufpj-activist] Dahr Jamail re Western oil firms remain as US
claims to leave Iraq
Date: Thu, 12 Jan 2012 11:42:15 -0500
From: Marilyn Levin <marilynl at alumni.neu.edu>
To: <unac-discussion at googlegroups.com>, <bostonunac at googlegroups.com>,
Community Education <CommunityEducation at yahoogroups.com>, UFPJ-activist
<ufpj-activist at lists.mayfirst.org>, massaction-boston
<massaction-boston at googlegroups.com>
http://www.aljazeera.com/indepth/features/2011/12/2011122813134071641.html
*Western oil firms remain as US exits Iraq *
*The end of the US military occupation does not mean Iraqis have full
control of their oil. *
*Dahr Jamail
<http://www.aljazeera.com/indepth/opinion/profile/dahr-jamail.html> Last
Modified: 07 Jan 2012 18:45 *
Description:
http://www.aljazeera.com/mritems/Images/2011/12/28/20111228132834721734_20.png
*Iraq plans to increase its oil production capacity up to 12 million
barrels per day by 2017 [Al Jazeera]*
*Baghdad, Iraq -* While the US military has formally ended its
occupation of Iraq, some of the largest western oil companies,
ExxonMobil, BP and Shell, remain.
On November 27, 38 months after Royal Dutch Shell announced its pursuit
of a massive gas deal in southern Iraq, the oil giant had its contract
signed for a $17bn flared gas deal.
Three days later, the US-based energy firm Emerson submitted a bid for a
contract to operate at Iraq's giant Zubair oil field, which reportedly
holds some eight million barrels of oil.
Earlier this year, Emerson was awarded a contract to provide crude oil
metering systems and other technology for a new oil terminal in Basra,
currently under construction in the Persian Gulf, and the company is
installing control systems in the power stations in Hilla and Kerbala.
Iraq's supergiant Rumaila oil field is already being developed by BP,
and the other supergiant reserve, Majnoon oil field, is being developed
by Royal Dutch Shell. Both fields are in southern Iraq.
According to the US Energy Information Administration (EIA), Iraq's oil
reserves of 112 billion barrels ranks second in the world, only behind
Saudi Arabia. The EIA also estimates that up to 90 per cent of the
country remains unexplored, due to decades of US-led wars and economic
sanctions.
"Prior to the 2003 invasion and occupation of Iraq, US and other western
oil companies were all but completely shut out of Iraq's oil market,"
oil industry analyst Antonia Juhasz told Al Jazeera. "But thanks to the
invasion and occupation, the companies are now back inside Iraq and
producing oil there for the first time since being forced out of the
country in 1973."
*"The last thing the US cares about in the Middle East is democracy. It
is about oil, full stop." *
*- Dr Abdulhay Yahya Zalloum*
Juhasz, author of the books /The Tyranny of Oil/ and /The Bush Agenda/,
said that while US and other western oil companies have not yet received
all they had hoped the US-led invasion of Iraq would bring them,
"They've certainly done quite well for themselves, landing production
contracts for some of the world's largest remaining oil fields under
some of the world's most lucrative terms."
Dr Abdulhay Yahya Zalloum, an international oil consultant and economist
who has spent nearly 50 years in the oil business in the US, Europe,
Asia and the Middle East, agrees that western oil companies have
"obtained concessions in Iraq's major [oil] fields", despite "there
being a lack of transparency and clarity of vision regarding the legal
issues".
Dr Zalloum added that he believes western oil companies have
successfully acquired the lions' share of Iraq's oil, "but they gave a
little piece of the cake for China and some of the other countries and
companies to keep them silent".
In a speech at Fort Bragg in the wake of the US military withdrawal, US
President Barack Obama said the US was leaving behind "a sovereign,
stable and self-reliant Iraq, with a representative government that was
elected by its people".
Of this prospect, Dr Zalloum was blunt.
"The last thing the US cares about in the Middle East is democracy. It
is about oil, full stop."
*A strong partnership?*
A White House press release dated November 30 titled, "Joint Statement
by the United States of America and the Republic of Iraq Higher
Coordinating Committee", said this about "energy co-operation" between
the two countries:
/"The United States is committed to supporting the Republic of Iraq in
its efforts to develop the energy sector. Together, we are exploring
ways to help boost Iraq's oil production, including through better
protection for critical infrastructure." /
Description:
http://www.aljazeera.com/mritems/imagecache/218/330/mritems/Images/2011/12/11/2011121184917300734_20.jpg
<http://www.aljazeera.com/indepth/spotlight/iraqschallenge/>
*Follow Al Jazeera's continuing coverage of Iraq*
Iraq is one of the largest oil exporters to the US, and has plans to
raise its overall crude oil exports to 3.3m barrels per day (bpd) next
year, compared with their target of 3m bpd this year, according to Assim
Jihad, spokesman for Iraq's ministry of oil.
Jihad told Al Jazeera that Iraq has a goal of raising its oil production
capacity to 12m bpd by 2017, which would place it in the top echelon of
global producers.
According to Jihad, Iraq's 2013 production goal is 4.5m bpd, and in 2014
it is 5m bpd. The 2017 goal is ambitious, given that Iraq did not meet
its 2011 goal, and many officials say 8m bpd capacity is more realistic
for 2017.
Unexplored regions of Iraq could yield an additional 100bn barrels, and
Iraq's production costs are among the lowest in the world.
To date, only about 2,000 wells have been drilled in Iraq, compared with
roughly one million wells in Texas alone.
Globally, current oil usage is approximately 88m bpd. By 2030, global
petroleum demand will grow by 27m bpd, and many energy experts see Iraq
as being a key player in meeting this demand.
It is widely understood that Iraq will require at least $200bn in
physical and human investments to bring its production capacity up to
12m bpd, from its current production levels.
Juhasz explained that ExxonMobil, BP and Shell were among the oil
companies that "played the most aggressive roles in lobbying their
governments to ensure that the invasion would result in an Iraq open to
foreign oil companies".
*Description:
http://www.aljazeera.com/mritems/Images/2011/12/28/2011122814578281734_3.jpg**Iraq's
oil reserves may be second only to Saudi Arabia's [EPA]*
"They succeeded," she added. "They are all back in. BP and CNPC [China
National Petroleum Corporation] finalised the first new oil contract
issued by Baghdad for the largest oil field in the country, the 17
billion barrel super giant Rumaila field. ExxonMobil, with junior
partner Royal Dutch Shell, won a bidding war against Russia's Lukoil
(and junior partner ConocoPhillips) for the 8.7 billion barrel West
Qurna Phase 1 project. Italy's Eni SpA, with California's Occidental
Petroleum and the Korea Gas Corp, was awarded Iraq's Zubair oil field
with estimated reserves of 4.4 billion barrels. Shell was the lead
partner with Malaysia's Petroliam Nasional Bhd., or Petronas, winning a
contract for the super-giant Majnoon field, one of the largest in the
world, with estimated reserves of up to 25 billion."
Zalloum says there is a two-fold interest for the western oil companies.
"There is development of the existing fields, but also for the explored
but not-yet-produced fields," he said. "For the old fields, there are
two types of development. One is to renovate the infrastructure, since
for most of the past 25 years it has depreciated due to the sanctions
and turmoil. Also, some of these fields have different stratum, so once
they use innovative techniques like horizontal drilling, there is a huge
potential in the fields they have explored."
But there are complicating factors. As a spasm of violence wracked
Baghdad in the wake of the US military withdrawal and political rifts
widen, Iraq's instability is evident.
"Iraq has lots of cheap-to-get oil, but it also has a multitude of
problems - political, ethnic, tribal, religious etc - that have
prevented them from exploiting it as well or as quickly as the Saudis,"
says Tom Whipple, an energy scholar who was a CIA analyst for 30 years.
"Someday it may turn out that Iraq has more oil underground than Saudi
Arabia. The big question is how stable it will be after the US leaves?
So far it is not looking all that good."
Jihad, Iraq's ministry of oil spokesman, however, said attacks against
Iraq's oil pipelines have minimal effect on production capabilities, and
claimed "sabotage will not affect our oil production and exports because
we can fix these damages within days, or even hours".
Whipple, a fellow at the Post-Carbon Institute, says Baghdad had driven
a hard bargain with western oil companies.
"The only reason they are participating is because everybody else is and
they hope to get a foot in the door in case some new government in Iraq
changes its policies to let other outsiders make more money. Remember it
is not all the traditional western oil companies that are in there; the
Chinese, Russians and Singapore all want a piece of the action."
*Wrong idea?*
Spokesman Jihad told Al Jazeera that the reason many Iraqis think
western oil companies are operating in Iraq is simply to steal Iraq's oil.
"These ideas were obtained during the regime of deposed dictator Saddam
Hussein, and these are the wrong ideas," he said. "The future will help
Iraqis understand these companies have come to work here to help Iraq
sell its oil to help the people, and they work to serve the country."
Jihad admitted that his media office works "to help Iraqis understand
the nature of the work of these companies and their investing in Iraq".
Despite the efforts of Jihad's office to prove otherwise, Iraqis Al
Jazeera spoke with disagree.
*"If Iraq had no oil, would America have sacrificed thousands of its
soldiers and hundreds of billions of dollars to come here?"*
*- Basim al-Khalili*
"Only a naïve child could believe the Americans came here for something
besides our oil," Ahmed Ali, an unemployed engineer, told Al Jazeera.
"Nor can we believe their being here has anything to do with helping the
Iraqi people."
Basim al-Khalili, a restaurant owner in Baghdad's Karada district, agrees.
"If Iraq had no oil, would America have sacrificed thousands of its
soldiers and hundreds of billions of dollars to come here?"
Oil analyst Juhasz also agrees.
"The US and other western oil companies and their governments had been
lobbying for passage of a new national law in Iraq, the Iraq Oil Law,
which would move Iraq from a nationalised to a largely privatised oil
market using Production Sharing Agreements (PSAs), a type of contract
model used in just approximately 12 per cent of the world's oil market."
She explained that this agreement has been summarily rejected by most
countries, including all of Iraq's neighbours, "because it provides far
more benefits to the foreign corporation than to the domestic government".
But it has not been an easy road for the western oil companies in Iraq.
"Major western companies, such as Chevron and ConocoPhillips, that had
hoped to sign contracts were unable to do so. A third round [of
contracts] took place in December 2010 and saw no major western oil
companies (except Shell) win contracts. I believe that there was an
Iraqi backlash against the awarding of contracts to the large western
major oil companies. Thus, in December 2010, fields went to Russian oil
companies Lukoil and Gazprom, Norway's Statoil, and the Angolan company
Sonangol, among others."
Unlike under Iraq's Oil Law, these contracts do not need to go through
parliament, according to the central government. This means the
contracts are being signed without public discourse.
*
Dahr Jamail reports from Baghdad on the recent bombings which left
scores dead across the country*
"The public is against privatisation, which is one reason why the law
has not passed," added Juhasz. "The contracts are enacting a form of
privatisation without public discourse and essentially at the butt of a
gun - these contracts have all been awarded during a foreign military
occupation with the largest contracts going to companies from the
foreign occupiers' countries. It seems that democracy and equity are the
two largest losers in this oil battle."
*Iraq's oil future *
Under the current circumstances, the possibility of a withdrawal of
western oil companies from Iraq appears remote, and the Obama
administration continues to pressure Baghdad to pass the Iraq Oil Law.
Nevertheless, resistance to the western presence continues.
"The bottom line is that it seems clear that the majority of Iraqis want
their oil and its operations to remain in Iraqi hands," said Juhasz.
"Thus far, it has required a massive foreign military invasion and
occupation to grant the foreign oil companies the access they have thus
far garnered."
While Iraq's security remains as volatile as ever, as does the political
landscape - which can change dramatically at any moment - there is one
thing we can always count on as being at the heart of these conflicts,
and that is Iraq's oil.
*/Follow Dahr Jamail on Twitter: @DahrJamail
<https://twitter.com/#%21/DahrJamail>/*
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