Socialist Worker

Iraqi oil to be handed to the West

by Chris Bambery
Issue No. 2108

Global oil corporations are set to return to Iraq, some five years after the US-led invasion of the country that plunged it into chaos.

US and European oil multinationals are scrambling to grab Iraq’s vast oil resources. Now the Iraqi puppet government is set to award contracts to Chevron, BP, Shell, Total, Exxon Mobil, and BHP Billiton.

Iraq holds the second biggest oil reserves in the world and the six oil fields being divided up contain between a third and two thirds of those reserves. If exploited they would boost the volume of Iraq’s oil by 60 percent.

The terms of the contracts on offer remain secret – though it has been revealed that the oil firms have drafted the terms themselves.

US advisors attached to the Iraqi oil ministry told the New York Times that US government lawyers and private sector consultants provided template contracts and detailed suggestions on drafting the contracts.

The Iraqi government claims they are standard “technical service contracts”. But in the oil industry these would be normally given to specialist companies with geological, construction or drilling expertise, or ones that install a particular piece of technology.

The big oil companies do not carry out such work. The “technical service contracts” are actually a means of handing over Iraq’s state-controlled oil resources to the multinationals – a privatisation in all but name.

There was no bidding process. BP was simply granted the Rumaila field and Shell the Kirkuk field.

Although the contracts are only for two years, an extension clause grants the oil companies the rights to future contracts.

Inside Iraq there is growing concern – even among government supporters in parliament – that the country’s wealth is being plundered and handed over to the oil giants.

For 40 years BP, Exxon Mobil, Total and Shell together ran the Iraq Petroleum Company, formed in 1912, which controlled Iraq’s oil. Its head office was in London’s Oxford Street.

The oil fields were finally nationalised in 1972 and there is widespread support within Iraq for keeping the oil in Iraqi hands.

Even before the 11 September 2001 attacks, George Bush’s administration had planned for an attack on Iraq and in order to gain control of its oil.

Now those plans are coming to fruition – at the cost of the Iraqi people.

Click here to subscribe to our daily morning email newsletter 'Breakfast in red'

Article information

Tue 1 Jul 2008, 18:49 BST
Issue No. 2108
Share this article


Mobile users! Don't forget to add Socialist Worker to your home screen.