Only in the most direct sense is the Bush administration’s Iraq policy directed against Saddam Hussein. In contrast to all the loud talk about terrorism, weapons of mass destruction, and human rights violations, very little is being said about oil. The administration has been tight-lipped about its plans for a post-Saddam Iraq and has repeatedly disavowed any interest in the country’s oil resources. But press reports indicate that U.S. officials are considering a prolonged occupation of Iraq after their war to topple Saddam Hussein. It is likely that a U.S.-controlled Iraq will be the linchpin of a new order in the world oil industry. Indeed, a war against Iraq may well herald a major realignment of the Middle East power balance.
Oil Forever
The Bush administration’s ties to the oil and gas industry are beyond extensive; they are pervasive. They flow, so to speak, from the top, with a chief executive who grew up steeped in the culture of Texas oil exploration and tried his hand at it himself; and a second-in-command who came to office with a multi-million dollar retirement package in hand from his post of CEO of Halliburton Oil. Once in office, the vice president developed an energy policy under the primary guidance of a cast of oil company executives whose identities he has gone to great lengths to withhold from public view. Since taking office, the president and vice president have assembled a government peopled heavily with representatives from the oil culture they came from. These include Secretary of the Army Thomas White, a former vice president of Enron, and Secretary of Commerce Don Evans, former president of the oil exploration company Tom Brown, Inc., whose major stake in the company was worth $13 million by the time he took office...
..At present, of course, this is mere potential—the Iraqi oil industry has seriously deteriorated as a result of the 1980-88 Iran-Iraq War, the 1991 Gulf War, and inadequate postwar investment and maintenance. Since 1990, the sanctions regime has effectively frozen plans for putting additional fields into production. It has also caused a severe shortage of oil field equipment and spare parts (under the sanctions regime, the U.S. has prevented equipment imports worth some $4 billion). Meanwhile, questionable methods used to raise output from existing fields may have damaged some of the reservoirs and could actually trigger a decline in output in the short run.9
But once the facilities are rehabilitated (a lucrative job for the oil service industry, including Vice President Cheney’s former employer, Halliburton) and new fields are brought into operation, the spigots could be opened wide. To pay for the massive task of rebuilding, a post-sanctions Iraq would naturally seek to maximize its oil production. Some analysts, such as Fadhil Chalabi, a former Iraqi oil official, assert that Iraq could produce 8-10 million b/d within a decade and eventually perhaps as much as 12 million.10..
..The impact on world markets is hard to overstate. Saudi Arabia would no longer be the sole dominant producer, able to influence oil markets single-handedly. Given that U.S.-Saudi relations cooled substantially in the wake of the September 11, 2001, terrorist attacks—rifts that may widen further—a Saudi competitor would not be unwelcome in Washington. An unnamed U.S. diplomat confided to Scotland’s Sunday Herald that “a rehabilitated Iraq is the only sound long-term strategic alternative to Saudi Arabia. It’s not just a case of swapping horses in mid-stream, the impending U.S. regime change in Baghdad is a strategic necessity.”11
Washington would gain enormous leverage over the world oil market. [Note: a reminder, the Oil companies do not own Washington DC, though I can see why the mistake was made...it's nowadays an assumption..]..
.. The dominant private companies (ExxonMobil and Chevron-Texaco of the U.S., Royal Dutch-Shell and BP of Britain and the Netherlands, TotalFinaElf of France), which are largely the result of recent megamergers, sell close to 29 million barrels per day in gasoline and other oil products. But production from fields owned by these “super-majors” came to 10.1 million barrels per day in 2001, or just 35% of their sales volume.17 Although these corporations have poured many billions of dollars into discovering new fields outside the Middle East, their proven reserves stood at just 44 billion barrels in 2001, 4% of the world’s total and sufficient to keep producing oil for only another 12 years at current rates.18 The situation is similar for other oil companies. Thus, the oil-rich Middle East, and particularly Iraq, remains key to the future of the oil industry...
..“Regime change” in Baghdad would reshuffle the cards and give U.S. (and British) companies a good shot at direct access to Iraqi oil for the first time in 30 years—a windfall worth hundreds of billions of dollars. U.S. companies relish the prospect: Chevron’s chief executive, for example, said in 1998 that he’d “love Chevron to have access to” Iraq’s oil reserves.23
In preface to the passage of Security Council Resolution 1441 on November 8, there were thinly veiled threats that French, Russian, and Chinese firms would be excluded from any future oil concessions in Iraq unless Paris, Moscow, and Beijing supported the Bush policy of regime change. Ahmed Chalabi, leader of the Iraqi National Congress (INC), an exile opposition group favored by the Bush administration, said that the INC would not feel bound by any contracts signed by Saddam Hussein’s government and that “American companies will have a big shot at Iraqi oil” under a new regime. U.S. and British oil company executives have been meeting with INC officials, maneuvering to secure a future stake in Iraq’s oil.24 Meanwhile, the State Department has been coaxing Iraqi opposition members to create an oil and gas working group involving Iraqis and Americans.25 Source:
http://www.fpif.org/papers/oil.html
