Iraq Poised to Become Western Oil Colony

As you read this post, I would advise that you pop in classic modern rock song “The Boys Are Back In Town” by Thin Lizzy.

Got the song on? Okay, now proceed with reading the post.

According to the New York Times, several Western oil companies that were kicked out of Iraq for 36 years during Saddam Hussein’s regime are currently finalizing negotiations to allow them to return to Iraq. These oil companies (Exxon Mobil, Shell, Total, BP, Chevron, and several smaller oil companies) beat out 40 other oil companies (primarily from Russia, China, and India) in order to get no-bid contracts from Iraq’s Oil Ministry for the country’s largest oil fields that would run for one to two years, but “would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.” Other competitors in the region, such as Lukoil (a Russian company) are getting kicked out in spite of claiming to have an previous agreement with Hussein’s government as well as an American firm that negotiated with the Kurds. The contracts were given to these companies because they had provided years of “free” services to the ministry (which incidentally has American advisers) and also because they have the most up to date technology. The goal of the companies is to increase production in order to alleviate the global increase of oil prices.

If the past history of these companies is any indication of how they will behave in the future, it may not be far fetched to claim that Iraq is on the verge of becoming nothing more than a Western oil colony. This claim is given more credence given the theory that the US is attempting to convince the Iraqi government to allow it to construct 58 permanent military bases (the country currently has 275 bases). [Bush Administration officials of course are denying such bases are permanent, but a lot Iraqi legislators don’t see it that way] (New York Times) Looking at the history of these oil companies in Iraq and the region in general reveals grand chessboard schemes, violation of international law, and intrigue.

For one thing, oil companies had a significant influence in the formation of the Middle East itself. The San Remo Conference held in Italy on April 27, 1920 confirmed the Sykes-Picot Agreement, a secret agreement between Britain and France made before WWI to divide up the Ottoman Empire, and the Balfour Declaration, which called for the creation of a Jewish homeland in Palestine (even though it belonged to the Ottoman Empire at the time). However, what the conference is most known for is that it resulted in Britain and France concluding a secret oil bargain that essentially enabled them to monopolize the entire future of oil in the Middle East. The US government later put pressure on the British government which conceded opening the monopoly up to seven American oil companies. (p 534-535 of “A Peace to End All Peace” by David Fromkin) The results of these activities eventually lead to the formation of the Iraq Petroleum Company.

Four of the companies mentioned in the beginning of this post were previously part of the Iraq Petroleum Company (called the Turkish Petroleum Company from 1912 - 1929) and essentially had a monopoly on Iraqi oil exploration from 1925 to 1961. The IPC was comprised of (1) the Anglo-Persian Oil Company (became the Anglo-Iranian Oil Company in 1935, and BP in 1954), (2) Royal Dutch/Shell, (3) Compaign Francaise Des Petroles (the French company that acquired German interests after World War I, which became Total in 1991), and (4) Near East Development Corporation (a consortium of five large US oil companies, including Standard oil) (Source). Their monopoly was supposed to have lasted for a period of 75 years, but was ended when General Qassem of the Ba’ath party nationalized it in 1961. They’ve been trying to get back ever since.

BP, as it is known today, was famous for its monopolization of the Iranian oil market and paying off small portions to Iran from its stupendously large profits. Naturally, this pissed off the Iranians who, like the Iraqis later on, moved to nationalize the industry. Western governments responded by overthrowing the democratically elected populist leader, Mossadegh, under the guise of “fighting communism.” The tyrannical dictator they put in power triggered a powerful reaction that culminated in the Iranian Islamic Revolution, which has resulted in an counter-hegemonic force in the Middle East comprised of Iran, Syria, Lebanon, Palestine, and some would argue, even within Iraq.

Royal Dutch/Shell was fined $2 million by the United Nations for violating the embargo against Iraq by shipping the country’s oil in April 2000. (New York Times) It was later fined $137 million by the European Commission for setting up a price fixing cartel of bitumen. (Houston Chronicle)

Its good to know that a bunch of corporations with a history of supporting Western imperialism, espionage, overthrowing legitimate governments, and repeatedly violating international law are getting to back to a country that was pretty much designed to cater to Western interests. But what can we say? Boys will be boys!

Global Intifada