The oil companies and Iraq

June 19, 2008 An article by Andrew E. Kramer appearing on the website of the New York Times last night reports on the awarding of no-bid contracts to Exxon-Mobil, Shell, Total, BP, and Chevron. The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. While the contracts are not large, they are considered important by industry analysts for establishing position with respect to a series of lucrative new contracts which are expected to open up soon. “The bigger prize everybody is waiting for is development of the giant new fields,” Leila Benali, an authority on Middle East oil at Cambridge Energy Research Associates, said in a telephone interview from the firm’s Paris office. The current contracts, she said, are a “foothold” in Iraq for companies striving for these longer-term deals. One question: since the oil companies are obviously benefiting from the American occupation of Iraq, when are they going to start paying some of the war's costs? Something else: since the 2003 invasion, I've spent more than two and a half years abroad, mostly in Turkey, Russia, and Azerbaijan. The vast majority of people I've spoken to about the war in those countries were convinced that the principle reason behind the invasion was America's desire to seize Iraqi oil. Call me naive, but I've always found such arguments simplistic. As tempting as it may be to see the war only in terms of a massive petro-conspiracy, it is important to look at broader contexts in the years preceding the invasion: the widespread assumption (even among people against the war) that Iraq was working on weapons of mass destruction and the increasingly militaristic and unilateralist policies of the United States (see Grenada, Libya, Iraq '91, Panama, and Yugoslavia) in previous administrations were at least as important in convincing Americans (both policymakers and otherwise) that problems could and should be solved through armed conflict. Most important of all, of course, was the enormous sense of fear that enveloped this country after 9/11. What's naive, in my opinion, is to assume that this fear did not also extend to people in the position of influencing policy. But when it comes to taking another country's resources, I guess there's never a bad time. There may have been other reasons for invading Iraq, and for staying there, but oil is nevertheless a big part of the picture. For those who believe that oil is the entire picture, the policies of the occupation authorities and their Iraqi partners do little to complicate this narrative.