23 August 2012
Published (with an intro by Tom Engelhardt) on TomDispatch
In 2011, after nearly nine years of war and occupation, U.S. troops finally left Iraq. In their place, Big Oil is now present in force and the country’s oil output, crippled for decades, is growing again. Iraq recently reclaimed the number two position in the Organization of the Petroleum Exporting Countries (OPEC), overtaking oil-sanctioned Iran. Now, there’s talk of a new world petroleum glut. So is this finally mission accomplished?
Well, not exactly. In fact, any oil company victory in Iraq is likely to prove as temporary as George W. Bush’s triumph in 2003. The main reason is yet another of those stories the mainstream media didn’t quite find room for: the role of Iraqi civil society. But before telling that story, let’s look at what’s happening to Iraqi oil today, and how we got from the “no blood for oil” global protests of 2003 to the present moment.
Here, as a start, is a little scorecard of what’s gone on in Iraq since Big Oil arrived two and a half years ago: corruption’s skyrocketed; two Western oil companies are being investigated for either giving or receiving bribes; the Iraqi government is paying oil companies a per-barrel fee according to wildly unrealistic production targets they’ve set, whether or not they deliver that number of barrels; contractors are heavily over-charging for drilling wells, which the companies don’t mind since the Iraqi government picks up the tab.
Meanwhile, to protect the oil giants from dissent and protest, trade union offices have been raided, computers seized and equipment smashed, leaders arrested and prosecuted. And that’s just in the oil-rich southern part of the country.
In Kurdistan in the north, the regional government awards contracts on land outside its jurisdiction, contracts which permit the government to transfer its stake in the oil projects — up to 25% — to private companies of its choice. Fuel is smuggled across the border to the tune of hundreds of tankers a day.
In Kurdistan, at least the approach is deliberate: the two ruling families of the region, the Barzanis and Talabanis, know that they can do whatever they like, since their Peshmerga militia control the territory. In contrast, the Iraqi federal government of Prime Minister Nouri al-Maliki has little control over anything. As a result, in the rest of the country the oil industry operates, gold-rush-style, in an almost complete absence of oversight or regulation.
Oil companies differ as to which of these two Iraqs they prefer to operate in. BP and Shell have opted to rush for black gold in the super-giant oilfields of southern Iraq. Exxon has hedged its bets by investing in both options. This summer, Chevron and the French oil company Total voted for the Kurdish approach, trading smaller oil fields for better terms and a bit more stability.
Keep in mind that the incapacity of the Iraqi government is hardly limited to the oil business: stagnation hangs over its every institution. Iraqis still have an average of just five hours of electricity a day, which in 130-degree heat causes tempers to boil over regularly. The country’s two great rivers, the Tigris and Euphrates, which watered the cradle of civilization 5,000 years ago, are drying up. This is largely due to the inability of the government to engage in effective regional diplomacy that would control upstream dam-building by Turkey.
After elections in 2010, the country’s leading politicians couldn’t even agree on how to form a government until the Iraqi Supreme Court forced them to. This record of haplessness, along with rampant corruption, significant repression, and a revival of sectarianism can all be traced back to American decisions in the occupation years. Tragically, these persistent ills have manifested themselves in a recent spate of car-bombings and other bloody attacks.
Washington’s Yen for Oil
In the period before and around the invasion, the Bush administration barely mentioned Iraqi oil, describing it reverently only as that country’s “patrimony.” As for the reasons for war, the administration insisted that it had barely noticed Iraq had one-tenth of the world’s oil reserves. But my new book reveals documents I received, marked SECRET/NOFORN, that laid out for the first time pre-war oil plans hatched in the Pentagon by arch-neoconservative Douglas Feith’s Energy Infrastructure Planning Group (EIPG).
In November 2002, four months before the invasion, that planning group came up with a novel idea: it proposed that any American occupation authority not repair war damage to the country’s oil infrastructure, as doing so “could discourage private sector involvement.” In other words, it suggested that the landscape should be cleared of Iraq’s homegrown oil industry to make room for Big Oil.
When the administration worried that this might disrupt oil markets, EIPG came up with a new strategy under which initial repairs would be carried out by KBR, a subsidiary of Halliburton. Long-term contracts with multinational companies, awarded by the U.S. occupation authority, would follow. International law notwithstanding, the EIPG documents noted cheerily that such an approach would put “long-term downward pressure on [the oil] price” and force “questions about Iraq’s future relations with OPEC.”
At the same time, the Pentagon planning group recommended that Washington state that its policy was “not to prejudice Iraq’s future decisions regarding its oil development policies.” Here, in writing, was the approach adopted in the years to come by the Bush administration and the occupation authorities: lie to the public while secretly planning to hand Iraq over to Big Oil.
There turned out, however, to be a small kink in the plan: the oil companies declined the American-awarded contracts, fearing that they would not stand up in international courts and so prove illegitimate. They wanted Iraq first to have an elected permanent government that would arrive at the same results. The question then became how to get the required results with the Iraqis nominally in charge. The answer: install a friendly government and destroy the Iraqi oil industry.
In July 2003, the U.S. occupation established the Iraqi Governing Council, a quasi-governmental body led by friendly Iraqi exiles who had been out of the country for the previous few decades. They would be housed in an area of Baghdad isolated from the Iraqi population by concrete blast walls and machine gun towers, and dubbed the Green Zone. There, the politicians would feast, oblivious to and unconcerned with the suffering of the rest of the population.
The first post-invasion Oil Minister was Ibrahim Bahr al-Uloum, a man who held the country’s homegrown oil expertise in open contempt. He quickly set about sacking the technicians and managers who had built the industry following nationalization in the 1970s and had kept it running through wars and sanctions. He replaced them with friends and fellow party members. One typical replacement was a former pizza chef.
The resulting damage to the oil industry exceeded anything caused by missiles and tanks. As a result the country found itself — as Washington had hoped — dependent on the expertise of foreign companies. Meanwhile, not only did the Coalition Provisional authority (CPA) that oversaw the occupation lose $6.6 billion of Iraqi money, it effectively suggested corruption wasn’t something to worry about. A December 2003 CPA policy document recommended that Iraq follow the lead of Azerbaijan, where the government had attracted oil multinationals despite an atmosphere of staggering corruption (“less attractive governance”) simply by offering highly profitable deals.
Now, so many years later, the corruption is all-pervasive and the multinationals continue to operate without oversight, since the country’s ministry is run by the equivalent of pizza chefs.
The first permanent government was formed under Prime Minister Maliki in May 2006. In the preceding months, the American and British governments made sure the candidates for prime minister knew what their first priority had to be: to pass a law legalizing the return of the foreign multinationals — tossed out of the country in the 1970s — to run the oil sector.
The law was drafted within weeks, dutifully shown to U.S. officials within days, and to oil multinationals not long after. Members of the Iraqi parliament, however, had to wait seven months to see the text.
How Temporary the Victory of Big Oil?
The trouble was: getting it through that parliament proved far more difficult than Washington or its officials in Iraq had anticipated. In January 2007, an impatient President Bush announced a “surge” of 30,000 U.S. troops into the country, by then wracked by a bloody civil war. Compliant journalists accepted the story of a gamble by General David Petraeus to bring peace to warring Iraqis.
In fact, those troops spearheaded a strategy with rather less altruistic objectives: first, broker a new political deal among U.S. allies, who were the most sectarian and corrupt of Iraq’s politicians (hence, with the irony characteristic of American foreign policy, regularly described as “moderates”); second, pressure them to deliver on political objectives set in Washington and known as “benchmarks” — of which passing the oil law was the only one ever really talked about: in President Bush’s biweekly video conferences with Maliki, in almost daily meetings of the U.S. ambassador in Baghdad, and in frequent visits by senior administration officials.
On this issue, the Democrats, by then increasingly against the Iraq War but still pro-Big Oil, lent a helping hand to a Republican administration. Having failed to end the war, the newly Democrat-controlled Congress passed an appropriations bill that would cut off reconstruction funds to Iraq if the oil law weren’t passed. Generals warned that without an oil law Prime Minister Maliki would lose their support, which he knew well would mean losing his job. And to ramp up the pressure further, the U.S. set a deadline of September 2007 to pass the law or face the consequences.
It was then that things started going really wrong for Bush and company. In December 2006, I was at a meeting where leaders of Iraq’s trade unions decided to fight the oil law. One of them summed up the general sentiment this way: “We do not need thieves to take us back to the middle ages.” So they began organizing. They printed pamphlets, held public meetings and conferences, staged protests, and watched support for their movement grow.
Most Iraqis feel strongly that the country’s oil reserves belong in the public sector, to be developed to benefit them, not foreign energy companies. And so word spread fast — and with it, popular anger. Iraq’s oil professionals and various civil society groups denounced the law. Preachers railed against it in Friday sermons. Demonstrations were held in Baghdad and elsewhere, and as Washington ratcheted up the pressure, members of the Iraqi parliament started to see political opportunity in aligning themselves with this ever more popular cause. Even some U.S. allies in Parliament confided in diplomats at the American embassy that it would be political suicide to vote for the law.
By the September deadline, a majority of the parliament was against the law and — a remarkable victory for the trade unions — it was not passed. It’s still not passed today.
Given the political capital the Bush administration had invested in the passage of the oil law, its failure offered Iraqis a glimpse of the limits of U.S. power, and from that moment on, Washington’s influence began to wane.
Things changed again in 2009 when the Maliki government, eager for oil revenues, began awarding contracts to them even without an oil law in place. As a result, however, the victory of Big Oil is likely to be a temporary one: the present contracts are illegal, and so they will last only as long as there’s a government in Baghdad that supports them.
This helps explain why the government’s repression of trade unions increased once the contracts were signed. Now, Iraq is showing signs of a more general return to authoritarianism (as well as internecine violence and possibly renewed sectarian conflict).
But there is another possibility for Iraq. Years before the Arab Spring, I saw what Iraqi civil society can achieve by organizing: it stopped the world’s superpower from reaching its main objective and steered Iraq onto a more positive course.
Many times since 2003 Iraqis have moved their country in a more democratic direction: establishing trade unions in that year, building Shi’a-Sunni connections in 2004, promoting anti-sectarian politicians in 2007 and 2008, and voting for them in 2009. Sadly, each of these times Washington has pushed it back toward sectarianism, the atmosphere in which its allies thrive. While mainstream commentators now regularly blame the recent escalation of violence on the departure of U.S. troops, it would be more accurate to say that the real reason is they didn’t leave far sooner.
Now, without its troops and bases, much of Washington’s political heft has vanished. Whether Iraq heads in the direction of dictatorship, sectarianism, or democracy remains to be seen, but if Iraqis again start to build a more democratic future, the U.S. will no longer be there to obstruct it. Meanwhile, if a new politics does emerge, Big Oil may discover that, in the end, it was mission unaccomplished. [source]
President Vladimir Putin lobbied Iraq’s prime minister on Wednesday to support Russian energy investment, as the oil arm of gas export monopoly Gazprom (GAZP.MM) pushes for a foothold in the semi-autonomous region of Kurdistan.
Gazprom Neft (SIBN.MM) is still interested in Kurdistan’s oil, company sources and the province’s spokesman said, rebutting reports it had frozen projects in the Iraqi province.
Putin, a vocal opponent of the U.S.-led invasion of Iraq in 2003, called for Russia to strengthen its presence in the OPEC oil producer state at talks with Prime Minister Nuri al-Maliki at his residence near Moscow.
“Our companies are boosting their activities in Iraq – the whole list of our large energy companies,” Putin said. “I hope their work will develop step by step and we are very much hoping for your support, Mr Prime Minister.”
Russia’s second-largest crude producer LUKOIL (LKOH.MM) is developing the vast West Qurna-2 oil, while mid-sized Bashneft (BANE.MM) is teaming up with Britain’s Premier Oil PLC (PMO.L) after they won the right to tap oil in the Middle East country.
LUKOIL bought Norway’s Statoil (STL.OL) out of their partnership in West Qurna-2 in March, and CEO Vagit Alekperov said he would be open to taking on board a new partner.
“We bought it, 100 pct, if there is a good offer we can sell part of it, so far we feel comfortable with it,” Alekperov told Reuters. Asked if there was an offer in the works, he said “at the moment no, only outline ideas.”
Russia signed $4.2 billion worth of arms deals with Iraq on Tuesday.
DEAL NOT FROZEN
Late on Tuesday, the International Oil Daily cited Iraqi Oil Minister Abdul-Kareem Luaibi as saying Baghdad had received a letter from Gazprom, in which the company said it had frozen its contract with Kurdistan.
Baghdad has been angered by the plans of some international majors, including ExxonMobil (XOM.N), to tap oil and gas in the northern region. The central government says the deals are illegal.
A spokesman for the Kurdistan Regional Government (KRG) said Gazprom Neft had informed the KRG on Wednesday that it remains committed to its contract in the Kurdistan region.
Sources at Gazprom Neft also knocked down the report.
In August, Gazprom Neft acquired interests in two blocks in Kurdistan.
“Gazprom Neft is still working on these projects. The company keeps its interest in Kurdistan,” a Gazprom Neft source told Reuters.
Another source at the company said Gazprom Neft would be able to go ahead with the projects once the Iraqi central government and KRG resolve their differences.
He also said Gazprom Neft management will travel to Kurdistan before year-end to discuss oil development in the province. A company spokeswoman declined to comment.
Gazprom Neft already has a project in Iraq, near the Iranian border, where it expects to produce about 15,000 barrels per day from 2013. [source ]
And the other side “de la moneda” Judge for yourselves
October 11, 2012
Iraq today stands on the brink of total control by Iran and the establishment of a new dictatorship.
The dream for which so many American soldiers believed they were fighting is slipping away as Iraq moves in the opposite direction – toward Iran.
Iran’s presence is already visible in Iraq, from the droves of pilgrims at Shi’ite holy sites to the brands of yogurt and jam on grocery shelves, and Iraqis see clear Iranian influence since the US troops left at the end of last year.
It could be considered a natural step for the only two Shi’ite Muslim-led governments in the Sunnidominated Middle East to expand their relationship. However, many Iraqi Shi’ites are cautious of intrusion of their country’s sovereignty and afraid of being overrun by the Iranian theocracy.
Iraqis are accusing Iran of meddling in Iraqi affairs to destabilize the new democracy and strengthen Iran’s influence over it and its neighbors. Top Iranian officials maintain they are only strengthening diplomatic and economic ties with Iraq, as they have sought to do since the 2003 ouster of Saddam Hussein. On the other hand, head of Iranian al-Quds Brigades General Qasim Sulaimani announced recently that Iraq and South Lebanon are submissive to Tehran’s will, stating that his country could regulate any movement with the aim to form Islamic governments in both countries.
Not to mention the close relationship between Iran and Syria. This is the goal of the Iranians: to form the Shi’ite crescent – Iran, Iraq, Syria and Southern Lebanon – controlled by Hezbollah. The aim is to encircle Israel. Israel should worry about Iraq acquiring F-16 aircraft from the United States, especially since their pilots will be selected from among the Shi’ites most loyal to the regime in Tehran. “Iran wants to make Iraq a weak state,” said Maj.- Gen. Jeffrey S. Buchanan, a US military spokesman in Iraq, a few years ago.
This issue has also worried many American officials who have long feared what they described as Iranian meddling in Iraq and its potential to sow unrest across the Middle East. Those worries were a chief driver of failed efforts to leave at least several thousand American troops in Iraq beyond the end of last year’s withdrawal deadline.
“The more you think about it, the more examples there are of Iranian influence,” says Buchanan. “They’re circumstantial, but that’s how behind-thescenes influence works.” Since Iraq’s 2010 election, Iraqis have witnessed the subordination of the state to Prime Minister Nouri al- Maliki’s Iranian-backed Da’awa party, the erosion of judicial independence and intimidation of opponents. All of this happened during the Arab Spring while other countries were ousting dictators in favor of democracy. Iraq has become a sectarian battleground in which identity politics have crippled democratic development.
Maliki has laid siege to his political opponents’ homes and offices, surrounded them with his security forces, all with the blessing of politicized judiciary and law enforcement systems that have become virtual extensions of his personal office.
This is a typical textbook definition of “lawfare.” His national security adviser has complete control over the Iraqi intelligence and national security agencies, which are supposed to be independent institutions but have become a virtual extension of Maliki’s Da’awa Party; and his Da’awa loyalists are in control of the security units that oversee the Green Zone. The Iraqi prime minister uses secret prisons under the supervision of his elite security apparatus, and the Red Cross has conclusive evidence about these prisons.
It was stated in its recent report that there is evidence detainees being tortured to extract confessions and information. The report mentioned that some of the torture sessions were attended by Iraqi judges. The Red Cross reported that there are three secret prisons in the Green Zone alone that are linked to Maliki’s office. The political process in Iraq is going in a very wrong direction; it’s going toward a dictatorship, while Iran views Maliki as its man in Baghdad and has dictated the shape of the current government.
This Shi’ite Islamist government bodes ill for the country’s future. Today in Iraq, we see Maliki silencing and eliminating his opponents, using the law as a silent weapon for a quiet war. MALIKI IS using the judicial system to attack his political opponents, and the security services in Iraq have become part of the problem as they have been proven to be managing secret detention centers where torture is practiced under the personal supervision of the Office of the Prime Minister. It was revealed recently that 36 out of 38 inspectors-general at Iraqi ministries are from Maliki’s Da’awa Party.
What we also see in Iraq now is that Iraq supports Syria, weapons from Iran being transported to Syria through Iraq, violations of UN security council resolutions against Iran and money laundering through Iraqi banks in favor of Iran with the full knowledge and support of the Office of the Prime Minister. The Iranian government played an important role in the revitalization of money laundering in Iraq by private banks in coordination with the Office of the Prime Minister. Armed groups backed by Tehran receive millions of dollars monthly in salaries and benefits from Iraqi banks under the guise of bank transfers or investment projects or grants to civil society organizations. It has been confirmed that Tehran-backed armed groups present in southern, central and northern Iraq are dealing with specific banks in these areas and receive their funds facilitated by the Da’awa Party. By consistently thinking of Maliki as a Shi’ite rather than an Iraqi Arab, American officials overlooked opportunities that once existed in Iraq but are now gone. Thanks to their own flawed policies, the Iraq they left behind is more similar to the desperate and divided country of 2006 than to the optimistic Iraq of early 2009. When American forces withdrew from Iraq at the end of last year, it was thought that they would be leaving behind a country that was politically unstable, increasingly volatile, and at risk of descending into the sort of sectarian fighting that killed thousands in 2006 and 2007. Nothing like this actually happened or will happen; instead we see Iraq falling under the full control of Iran. It is controlled by Iran’s embassy in Baghdad and its many consulates in other Iraqi cities. From a strategic standpoint, one can say that Iraq, with all its territory and capabilities, has become Iran’s strategic depth, supplementing its regional expansion.
Iran controls the political decision-making and economy of Iraq. For all of its potential, Iraq has become merely an advanced strategic base for Iran. Iran may want to strike Israel via Hezbollah, and Iraq, due to its geographical location and the nature of the ruling powers, will be a key player in this regard.
This is especially true when we observe in Iraq today that there is education, promoted by the Shi’ite parties linked to Iran, saying that the expulsion of Jews from the land of Palestine will be only at the hands of the Islamic Republic of Iran. It should also be noted that Iran is not crazy enough to attack the Gulf States and risk losing its legitimacy, as happened with Iraq when it invaded Kuwait. Iran must not be seen attacking Muslim states, which will antagonize the Muslim world. Iran will certainly target Israel first; this is the issue, aided by warmongering media campaigns, that would garner sympathy for Iran among the ignorant people of the Islamic world.[source]