U.S. loses out on Iraqi oil contracts

It was a bit of a shock when earlier this month the United States failed to secure even a single deal in the auction of the second round of contract bids, which will shape the Iraqi oil industry for many years to come.

It couldn’t help but be noticed that “Two of the most lucrative of the multi-billion dollar oil contracts went to two countries which bitterly opposed the U.S. invasion — Russia and China — while even Total Oil of France, which led the charge to deny international approval for the war at the U.N. Security Council in 2003, won a bigger stake than the Americans in the most recent auction,” Time magazine reported.

The bids were supervised by the Iraqi Oil Ministry and not overseen by the U.S., as was probably the initial intention when the plans to invade Iraq and take control of their oil was first dreamed up by the neocons. What they failed to understand was that the Iraqi people do not feel that they owe us anything after their country was virtually destroyed in a vain search for the elusive weapons of mass destruction.

Oil billionaire T. Boone Pickens expressed his annoyance at the fact that U.S. oil corporations were being forced to compete with foreign companies for Iraqi oil contracts: “They’re opening them up to other companies all over the world ... we’re entitled to it,” Pickens insisted, warning that after six years of American occupation, “we leave there with the Chinese getting the oil,” Pickens was quoted in the Financial Times. It can only be assumed that Mr. Pickens speaks for the majority of those known as American big oil.

Speculation is that the Iraqi government under Nouri al-Maliki is showing its displeasure at the United States for six and a half years of invading, occupying, destroying and then rebuilding of his country, by not giving into what can only be described as American designs on Iraqi oil. Another perspective might be that it proves that the U.S. failed to accomplish one of its main goals of gaining control or at least influence over Iraqi oil reserves for the foreseeable future.

The Iraqi government made it clear that they would not award oil contracts based on outside political considerations, but rather on prices and on production targets. It seems obvious from the outcome of the awards that the U.S. companies may not have been financially able to compete on either front with the foreign bidders, particularly China.

It is somewhat ironic that prior to the U.S. invasion in 2003, Russian and Chinese companies were the dominant contractors for the “black gold” of the Iraqi desert, and now they have beaten out American bidders, although to some American companies it may seem more like a slap in the face than irony.

I’m sure that going into the Iraqi invasion, even in its early planning stages prior to 9/11, the Cheney-Rumsfeld big-picture never looked quite the way that it does today. None of them could have imagined way back then that the United States would ever lose out to China and Russia for Iraqi oil deals. It would just have been totally unthinkable.

The other fly in the ointment for the U.S. when it comes to access to the oil fields in southern Iraq is Iran, and its control of the port city of Basra. According to an article in The Atlantic, “Basra and its surrounding area are not really part of Iraq anymore.” Iran has in effect taken over one-third of Iraq and it is being controlled by Iranian-backed political parties, Da ‘Wa and other Shia groups all under the control of Tehran. So the fact that Basra provides the only maritime access and is the main oil export route in the country, it has become a huge problem for the United States. It is something that former- leader Saddam Hussein would never have allowed to happen.

An Iranian-allied faction is in charge of Iraq’s oil exports and has a direct role in “reviewing lists of foreign companies bidding on Iraq’s mega oil fields in the south. In other words, you can’t do business in southern Iraq without a green light from Tehran. And no one even bothers to hide Iran’s role,” The Atlantic reported last week.

It was just a few months back that Russia and China protected Iran from U.N. sanctions that would have destroyed their economy. So the fact that those two countries are the big winners for the Iraqi oil contracts should not be that surprising. You might say that all is fair when it comes to a love of oil and money, or at least that is the case in Iraq these days.

ABOUT THE WRITER
Carol Jensen is a long-time Barstow resident, graduating from Kennedy High School and Barstow College, where she was an English instructor for many years. Much of her time now is spent writing political and social commentary. She may be contacted at cajensen49@msn.com.