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Did Bush and his oil-company friends invade Iraq so they
could develop Iraq's massive oil reserves, produce oil in
huge quantities and cripple their companies and destroy
their profits? Or, did they invade Iraq to make sure their
oil stayed in the ground?
"Keeping Iraq's Oil In the Ground
By Greg Palast, AlterNet
Posted on June 14, 2006, Printed on April 15, 2008
http://www.alternet.org/story/37371/
World oil production today stands at more than twice the
15-billion a-year maximum projected by Shell Oil in 1956 --
and reserves are climbing at a faster clip yet. That leaves
the question, Why this war?
Did Dick Cheney send us in to seize the last dwindling
supplies? Unlikely. Our world's petroleum reserves have
doubled in just twenty-five years -- and it is in Shell's
and the rest of the industry's interest that this doubling
doesn't happen again. The neo-cons were hell-bent on raising
Iraq's oil production. Big Oil's interest was in suppressing
production, that is, keeping Iraq to its OPEC quota or less.
This raises the question, did the petroleum industry, which
had a direct, if hidden, hand, in promoting invasion,
cheerlead for a takeover of Iraq to prevent overproduction?
It wouldn't be the first time. If oil is what we're looking
for, there are, indeed, extra helpings in Iraq. On paper,
Iraq, at 112 billion proven barrels, has the second largest
reserves in OPEC after Saudi Arabia. That does not make
Saudi Arabia happy. Even more important is that Iraq has
fewer than three thousand operating wells... compared to one
million in Texas.
That makes the Saudis even unhappier. It would take a decade
or more, but start drilling in Iraq and its reserves will
about double, bringing it within gallons of Saudi Arabia's
own gargantuan pool. Should Iraq drill on that scale, the
total, when combined with the Saudis', will drown the oil
market. That wouldn't make the Texans too happy either. So
Fadhil Chalabi's plan for Iraq to pump 12 million barrels a
day, a million more than Saudi Arabia, is not, to use Bob
Ebel's (Center fro Strategic and International Studies)
terminology, "ridiculous" from a raw resource view, it is
ridiculous politically. It would never be permitted. An
international industry policy of suppressing Iraqi oil
production has been in place since 1927. We need again to
visit that imp called "history."
It began with a character known as "Mr. 5%"-- Calouste
Gulbenkian -- who, in 1925, slicked King Faisal, neophyte
ruler of the country recently created by Churchill, into
giving Gulbenkian's "Iraq Petroleum Company" (IPC) exclusive
rights to all of Iraq's oil. Gulbenkian flipped 95% of his
concession to a combine of western oil giants:
Anglo-Persian, Royal Dutch Shell, CFP of France, and the
Standard Oil trust companies (now ExxonMobil and its
"sisters.") The remaining slice Calouste kept for himself --
hence, "Mr. 5%."
The oil majors had a better use for Iraq's oil than drilling
it -- not drilling it. The oil bigs had bought Iraq's
concession to seal it up and keep it off the market. To
please his buyers' wishes, Mr. 5% spread out a big map of
the Middle East on the floor of a hotel room in Belgium and
drew a thick red line around the gulf oil fields, centered
on Iraq. All the oil company executives, gathered in the
hotel room, signed their name on the red line -- vowing not
to drill, except as a group, within the red-lined zone. No
one, therefore, had an incentive to cheat and take red-lined
oil. All of Iraq's oil, sequestered by all, was locked in,
and all signers would enjoy a lift in worldwide prices.
Anglo-Persian Company, now British Petroleum (BP), would
pump almost all its oil, reasonably, from Persia (Iran).
Later, the Standard Oil combine, renamed the
Arabian-American Oil Company (Aramco), would limit almost
all its drilling to Saudi Arabia. Anglo-Persian (BP) had
begun pulling oil from Kirkuk, Iraq, in 1927 and, in
accordance with the Red-Line Agreement, shared its Kirkuk
and Basra fields with its IPC group -- and drilled no more.
The following was written three decades ago:
Although its original concession of March 14, 1925,
cove- red all of Iraq, the Iraq Petroleum Co., under the
owner- ship of BP (23.75%), Shell (23.75%), CFP [of France]
(23.75%), Exxon (11.85%), Mobil (11.85%), and [Calouste]
Gulbenkian (5.0%), limited its production to fields
constituting only one-half of 1 percent of the country's
total area. During the Great Depression, the world was awash
with oil and greater output from Iraq would simply have
driven the price down to even lower levels.
Plus
could develop Iraq's massive oil reserves, produce oil in
huge quantities and cripple their companies and destroy
their profits? Or, did they invade Iraq to make sure their
oil stayed in the ground?
"Keeping Iraq's Oil In the Ground
By Greg Palast, AlterNet
Posted on June 14, 2006, Printed on April 15, 2008
http://www.alternet.org/story/37371/
World oil production today stands at more than twice the
15-billion a-year maximum projected by Shell Oil in 1956 --
and reserves are climbing at a faster clip yet. That leaves
the question, Why this war?
Did Dick Cheney send us in to seize the last dwindling
supplies? Unlikely. Our world's petroleum reserves have
doubled in just twenty-five years -- and it is in Shell's
and the rest of the industry's interest that this doubling
doesn't happen again. The neo-cons were hell-bent on raising
Iraq's oil production. Big Oil's interest was in suppressing
production, that is, keeping Iraq to its OPEC quota or less.
This raises the question, did the petroleum industry, which
had a direct, if hidden, hand, in promoting invasion,
cheerlead for a takeover of Iraq to prevent overproduction?
It wouldn't be the first time. If oil is what we're looking
for, there are, indeed, extra helpings in Iraq. On paper,
Iraq, at 112 billion proven barrels, has the second largest
reserves in OPEC after Saudi Arabia. That does not make
Saudi Arabia happy. Even more important is that Iraq has
fewer than three thousand operating wells... compared to one
million in Texas.
That makes the Saudis even unhappier. It would take a decade
or more, but start drilling in Iraq and its reserves will
about double, bringing it within gallons of Saudi Arabia's
own gargantuan pool. Should Iraq drill on that scale, the
total, when combined with the Saudis', will drown the oil
market. That wouldn't make the Texans too happy either. So
Fadhil Chalabi's plan for Iraq to pump 12 million barrels a
day, a million more than Saudi Arabia, is not, to use Bob
Ebel's (Center fro Strategic and International Studies)
terminology, "ridiculous" from a raw resource view, it is
ridiculous politically. It would never be permitted. An
international industry policy of suppressing Iraqi oil
production has been in place since 1927. We need again to
visit that imp called "history."
It began with a character known as "Mr. 5%"-- Calouste
Gulbenkian -- who, in 1925, slicked King Faisal, neophyte
ruler of the country recently created by Churchill, into
giving Gulbenkian's "Iraq Petroleum Company" (IPC) exclusive
rights to all of Iraq's oil. Gulbenkian flipped 95% of his
concession to a combine of western oil giants:
Anglo-Persian, Royal Dutch Shell, CFP of France, and the
Standard Oil trust companies (now ExxonMobil and its
"sisters.") The remaining slice Calouste kept for himself --
hence, "Mr. 5%."
The oil majors had a better use for Iraq's oil than drilling
it -- not drilling it. The oil bigs had bought Iraq's
concession to seal it up and keep it off the market. To
please his buyers' wishes, Mr. 5% spread out a big map of
the Middle East on the floor of a hotel room in Belgium and
drew a thick red line around the gulf oil fields, centered
on Iraq. All the oil company executives, gathered in the
hotel room, signed their name on the red line -- vowing not
to drill, except as a group, within the red-lined zone. No
one, therefore, had an incentive to cheat and take red-lined
oil. All of Iraq's oil, sequestered by all, was locked in,
and all signers would enjoy a lift in worldwide prices.
Anglo-Persian Company, now British Petroleum (BP), would
pump almost all its oil, reasonably, from Persia (Iran).
Later, the Standard Oil combine, renamed the
Arabian-American Oil Company (Aramco), would limit almost
all its drilling to Saudi Arabia. Anglo-Persian (BP) had
begun pulling oil from Kirkuk, Iraq, in 1927 and, in
accordance with the Red-Line Agreement, shared its Kirkuk
and Basra fields with its IPC group -- and drilled no more.
The following was written three decades ago:
Although its original concession of March 14, 1925,
cove- red all of Iraq, the Iraq Petroleum Co., under the
owner- ship of BP (23.75%), Shell (23.75%), CFP [of France]
(23.75%), Exxon (11.85%), Mobil (11.85%), and [Calouste]
Gulbenkian (5.0%), limited its production to fields
constituting only one-half of 1 percent of the country's
total area. During the Great Depression, the world was awash
with oil and greater output from Iraq would simply have
driven the price down to even lower levels.
Plus
