Monday, October 26, 2009

If the war in Iraq was fought for oil, why aren't we getting any?

If, as US progressives like Noam Chomsky claim, the war in Iraq is all about oil, why aren't the US oil companies getting any?
By Tom Doggett
October 23, 2009

Oil tycoon T. Boone Pickens told Congress on Wednesday that U.S. energy companies are "entitled" to some of Iraq's crude because of the large number of American troops that lost their lives fighting in the country and the U.S. taxpayer money spent in Iraq.

Boone, speaking to the newly formed Congressional Natural Gas Caucus, complained that the Iraqi government has awarded contracts to foreign companies, particularly Chinese firms, to develop Iraq's vast reserves while American companies have mostly been shut out.

"They're opening them (oil fields) up to other companies all over the world ... We're entitled to it," Pickens said of Iraq's oil. "Heck, we even lost 5,000 of our people, 65,000 injured and a trillion, five hundred billion dollars."

President Barack Obama has pledged to withdraw U.S. troops in Iraq."We leave there with the Chinese getting the oil," Pickens said.

Iraq's Oil Minister Hussain al-Shahristani told a Washington conference on Wednesday that his government was happy with the energy auction it held earlier this year. The auction was the first chance for foreign oil firms to compete for Iraqi oil since the U.S.-led invasion in 2003.

"We're pleased with scale and participation of the IOC (International Oil Companies) and the transparent and public competition," Shahristani said at a U.S.-Iraq business and investment conference.

BP and the Chinese oil company CNPC were the only firms to win a contract in Iraq's bid round this summer, the first chance for foreign oil firms to compete for Iraqi oil since the U.S.-led invasion in 2003. Seven other oil and gas fields failed to attract bidders on the terms Iraq offered.

But a consortium headed by Italy's ENI said last week it signed a deal to develop the giant Zubair field for a remuneration fee of $2 a barrel. At Iraq's oilfield auction in June, the consortium refused to go below $4.40 a barrel.

Two consortiums are still competing for a deal to develop the even larger West Quran oilfield. They are Russia's LUKOIL and ConocoPhillips and another consortium headed by Exxon Mobil.

Labels: , , , , ,


At 5:22 PM, Blogger murphstahoe said...

Pickens is obfuscating. If US energy companies benefit from being able to extract the oil, that benefits US energy companies, and their stockholders. I'm pretty certain Pickens belongs in that category. If any US Citizen wants to take advantage of the fact that money will be made extracting that oil, they can buy shares in BP and share in that largesse. Of course, the rank and file of the US Military isn't the sort with the large amounts of disposable income to buy 1000's of shares of BP.

For the average US citizen, the benefit from the war - the oil price benefit - comes simply from the fact that the oil keeps flowing. Even if not one drop goes from Iraq to the US, that increases the overall world supply and the amount of oil available for US purchase from the Russians, Saudis, etc... increases. Supply goes up, prices go down. Energy prices go down, energy based economies thrive.

Hussein was a threat to the stability of the oil supply - regardless of who was doing the drilling. Ergo, war for oil.

At 8:58 AM, Blogger Rob Anderson said...

Thanks for clearing that up, Mr. Know-it-all. Could you provide just a shred of evidence for your fact-free analysis? I've never seen any evidence that President Bush, Rumsfeld, Rice, et al considered the oil issue at all before the US invaded Iraq.

At 12:56 PM, Blogger murphstahoe said...

You're right. Bush was too focused on the "Weapons of Mass Destruction"...

At 12:59 PM, Anonymous Anonymous said...

Murph's analysis doesn't even make sense. Under Saddam Hussein, Iraq's oil was flowing into the world supply – even if it was being sold in different places than today – and so, by Murph's own logic, the U.S. consumer was benefitting exactly the same as today. World supply was being increased, prices brought down, etc.

In fact, under any competent government, Iraq's oil would flow to the world; it's their cash cow and their only real way of generating money. No government, whether a despot or a democracy, would be able to ignore it. Only during anarchy, when no functioning government existed, did oil stop flowing.

So if the only objective of the government was that oil keep flowing, there was no reason for war. This was not a "war for oil" and Murphy has disproved his own fallacy.

At 3:53 PM, Blogger murphstahoe said...

Under an ostensibly Western Controlled government, the country will be more stable, less subject to random acts of strife. If you don't think this can happen, witness the stability of the supply in Nigeria.

At 9:50 AM, Blogger Lex said...

"Under an ostensibly Western Controlled government, the country will be more stable, less subject to random acts of strife."

That's a real reach. Hussein was in power from 1979 through 2003 and the only thing that cause the oil to stop flowing was the instability brought on by the aftermath of the US invasion. Iqaq under Hussein was a dictatorship but it was certainly stable.

I strongly objected to the Iraq war because it was a waste of American resources but I never thought it was about oil - it was about stupidity.

At 11:46 AM, Blogger murphstahoe said...

"I never thought it was about oil - it was about stupidity."

I certainly can't disagree with that, but there's no disputing the people with their fingers on the levers stood to gain financially from the whole thing, oil or no oil.

Regardless, it's one thing to keep oil flowing, it's another to control the ability to do extensive development and exploration, keep pipelines in one piece, do repairs, etc...

One can posit that Hussein lived a very posh lifestyle and was able to pay enough people to make sure that it stayed that way, minus a major invasion. If he decided to shut the flow of oil off, it would be no skin off his back, but would impact the high energy consuming nations. Frankly, Bin Laden got it wrong. If he really wanted to cripple the US, he should have blown up oil ports in Saudi Arabia, Iran, Venezuela, etc...

At 6:24 AM, Anonymous David said...

Iraq to Award Oil Field To ExxonMobil, Shell

Iraq is expected to award its giant West Qurna-1 oil field in southern Iraq to a consortium comprising Exxon Mobil Corp. and Royal Dutch Shell PLC, a senior Iraqi oil official said.
Exxon Mobil and Shell didn't secure the field in June because they rejected Iraq's maximum remuneration fee of $1.90 a barrel.

Wall Stret Journal link

Good things come to those who wait.


Post a Comment

Links to this post:

Create a Link

<< Home